The 38^th International Agriculture Show (SIA) and the 110^th General Agricultural Competition was held last week (18-25 February 2001) in Paris under the headline "No future without Agriculture!" Nearly 1400 exhibitors were visited by over 600,000 professionals and their families as the show coincided with French winter school holidays. Cognac and Pineaux were well represented; father-son Denechere and their Close de la Groie products of which Vieille Reserve Cognac holds a promise, H. Begey with a full line of eaux-de-vie based cocktails, Begaud, Guerbe, Lheraud, Rouissille, Pouilloux and Tesseron with his new long drink product Exalt. Patrick Tesseron actually was in Cuba (Cigar Festival in Havana combined with a bit of holidays) but his nephew Brice did an admirable job in promoting Exalt. The clean metallic packaging from Philippe Seys’ VO agency in Angouleme accentuates Exalt’ market target; bars, discos, youth. Both in taste and in packaging, Exalt qualifies as the first worthwhile competitor to Hennessy Pure White.

Just across from the BNIC stand was the Guy Lheraud stand. There we escaped to taste some interesting vintages with Guy and his son Laurent; Petite Champagne 1970, Grande Champagne 1965, Fins Bois 1968 and 1950 Grande Champagne. But to give it a proper attention we will visit Domaine de Lasdoux soon. During Martell and Hennessy evenings, Guy Lheraud said: "I love when big brands get involved. They are the engines that pull the Cognac train. And Hennessy is like a TGV". We all nodded in agreement.

The determined efforts of Claire Coates, BNIC Communication Dirtector and the recently appointed President of the BNIC Communication Comittee, Robert Pouchayret of Martell are showing results; bigger space, updated Cognac Tower and a new initiative to involve Cognac producers.

During SIA in Paris, competition for medals in Cognac, Pineau des Charentes, Vin de Pays Charentais and Armagnac product category was tough as the quality is improving every year. Sunday morning in a Cognac competition that is administered by the BNIC, the jury had difficulties in choosing as they awarded 2 silvers and 2 bronzes in a VSOP category and 3 golds and 3 bronzes in an XO category. Pineau des Charentes jury has done one better. They awarded 4 golds in Pineau Blanc under 5 years category, 3 golds and 3 bronzes in Pineau Rose category. Medals are a reward and recognition. When they are dispensed in volume they devalue the whole process and render such competition meaningless. This is unfair to producers and products that truly deserve winning medals. Furthermore, each medal recipient sticks a little round label on its bottle telling the consumer of its winning product. When the consumer sees too many little round stickers on too many bottles, he or she begins wondering. The tasting juries must tighten their ratings so awarding 2 medals is an exception rather than the rule. For winners in Paris click http://www.concours-agricole.com Cognac Drouet won silver for VSOP and gold for XO. Jacques Estève won gold for his Cognac XO, silver for Pineau Blanc 5-10 years old and bronze for Pineau Blanc more than 10 years old.

During the Martell day at the BNIC stand in Paris, Torula News was reporting live on the Cognac presence at the show for National Public Radio (NPR). USA is the single largest market for Cognac. The radio program host was fascinated with a Cognac offered by a bar in Atlanta, Georgia at US$360 per drink. The Cognac in question was L'Esprit de Courvoisier.

Not all is well in the Cognac global markets; leading category is the least profitable, Euro zone bought less in 2000 and the Cognac Association (BNIC) seems unable to adjust its promo-travel itineraries to start focussing on Northern Europe, Scandinavia and Italy, for example. Americans drink more Cognac but with a slowdown in the economy (predicted for the first 6 months of 2001) it will be up to Hennessy, Martell and few others to keep up promotions and advertising  strong enough to not loose any consumers. The challenge here, and elsewhere, is to convert consumers from VS to XO and higher. Once again, a simple generic advertising campaign by BNIC would go a long way with a small reminder that Cognac is a by-product of wine, that is made some 30 minutes from Bordeaux wines (forget local or regional politics) and that is the utmost in drinking luxury.As we frequently wrote in the past, the Cognac crisis is not over even if year 2000 data is a bit rosier than before. Accelerate restructuring of the industry, merge more 2nd and 3rd tier Cognac houses, simplyfy labels, reduce the number of confusing categories (i.e. Napoleon, Vieille Reserve), tighten the definitions of Extra, Hors d'Age and make XO a minimum of 20 years old, improve quality and start generic product promotion and advertising (Data from BNIC 01-12/2000)

So here it is a product that looks like a replacement for a Courvoisier Millennium with a name that might as well join Martell’s mis-named adventures into the Duty Free market with Artys and Odys. But Millennium like Arys and Odys did make money for their respective producers. Will Natur do the same?

"You should drink balzam like you would drink a fine cognac," said Galina Savostyanova recently in Ussuriysk, Russia according to Michael Wines of the New York Times Service. She added: "You should keep it in your mouth. You should feel all the flavors." Ussuriyyskiy balzam like all other balzams is an alcoholic drink, 90-proof, vodka based but with varied number of added ingredients ranging from raspberry, mint, chamomile, ginseng, schizandra, red linden berries and others. This balzam comes in an elegant bottle with a Siberian tiger on the label (not unlike the Cognac Meukow Panther which has its roots in Russia). Local factory makes 360,000 bottles per year using modern Italian bottling equipment. Balzams history dates back to 17^th century and it is not dissimilar to history of Cognac. Foreigners, mainly Latvians and Norwegians, developed the concept of blending local herbs, berries, spices, roots with a heavy dose of pure alcohol. So is this a folk medicine that is being compared to Cognac (remember medicinal brandy from Larsen?) or is it just a latest fad drink based on vodka with clear similarities to Rémy Red which is based on Cognac. There are balzams with 17 to 90 different ingredients so we might see yet different Cognacs with berries, herbs etc. And why not? (IHT15/02/01)

The Cognac Chamber of Commerce came up with a great idea. During the upcoming Vinexpo 17 – 21 June you might be able to fly with Air Angouleme for 700-800 FRF (US$100-115) between Cognac and Bordeaux. Subject to enough customers, the flights will be on. Two years ago the sisters Bru dazzled the locals with their helicopter arrivals and departures at Vinexpo so this time the locals should take into the air as on the ground the widening of the Autoroute 10 and the Bordeaux bridges will create a real mess. For once, Cognac hotels should unite and offer special stay/heli fare during Vinexpo. (Sud-Ouest13/02/01)

One of the email’s following our item on Cognac brands on Internet pointed us to an editorial in Red Herring of 30/01/01. We quote: "Never before has the consumer had all the cards dealt face up where he can make choices and decisions knowing all the facts. In traditional marketplaces, consumers have always had to deal with confusion, arcane language, and obfuscation… Now consumers are being put in a position in which they have phenomenal access to whatever they want." This quote comes from Don Valentine of Sequoia Capital whose investments empowered Apple, Yahoo, Cisco and 3Com to their successes. The Cognac industry and that includes BNIC, and most of the key exporting brands and producers need to pay attention to this quote. So far they are offering a mambo-jumbo, slick as it might be, but a mambo-jumbo that consumer is not buying into. Examples are hundreds; from product category definitions, confusing labels to promotion brochures that talk about long drinks and cocktails only. Internet has empowered consumer worldwide to search and obtain simple and straightforward information. Once that is accomplished the consumer will begin buying Cognac on the Internet in greater quantities. (Red Herring 30/01/01)

Every Friday evening, at 21:00 from 13 July to 14 September 2001, a great tourist car circuit continues. Originally, initiated by the Segonzac Tourism Office and the then President, Francine Forgeron, the idea keeps on growing with a great success. This year the theme is bread making so the visits are to various wind mills in the valley of the river Né. But since this is Grande and Petite Champagne crus country as well, a visit to a distillery is included. For details and English version car cassettes contact Segonzac Tourism Office.

This tip came from a couple of hard working guys who are successfully selling Cognac in the UK. Thanks.

Sometimes first might not be the best. Case in point is the presence of Cognac brands on the Internet. Courvoisier with its "State of Courvoisier" site that has disappeared and is replaced by a 1 web page corporate bla bla, then came Hennessy, Rémy Martin and at least 2 iteration of Manier. All of those sites were presenting and targeting their product at the USA market. Yes, it is the biggest single country market for Cognac but at the same time they buy and drink Cognac elsewhere around the world. So, when Martell showed up on the Internet, some 2-3 years late, it was like a whiff of Cordon Bleu – well thought out, exciting presence. You may or may not like Miss Martell innuendoes, but you must remember that the New York office of TBWA produced it. It simply reflects repressed puritan desires of Americans. And then, about 2 weeks ago a real stunner, Otard showed up on Internet. We think that when the site will be completed it will show the other brands the way to do it. They clearly thrown down the gauntlet and we expect to see response from Hennessy, Rémy Martin or Manier, shortly. This, of course, raises a question when Camus, Polignac, Meukow and a few others will be present on the Internet. The next tiers of Cognac producers, which are present on the Internet, from Unicognac to Godet, are straightforward publicity brochures masquerading as web pages. Cognac consumer is looking for more than a splash of Macromedia Flash, local virtuosity in proper French but usually poor English in seconds. And there are still producers, which we call "the first Internet generation presence", that generate significant amount of traffic even though their web pages download in nanoseconds, provide straightforward information about product, contacts etc. Among those "first" are Larsen, Delamain, Giraud, Ragnaud-Sabourin, Fillioux, Gautier, Gourmel, Hardy, Thorin and so on. Some of those producers reside on this site.

Consumer wants simple, quick access to product information including where to buy it or whom to contact by countries (besides Hardy, Giraud and Otard no one else provides this info!). Leave the selling of bottles to others; wine sites, e-shops etc. Bravo, Otard! Good going Martell! How will Hennessy, Rémy Martin and others respond?

…And running… on 7 April 2001!

We do occasionally look around various B2B sites that might be offering Cognac. Recently at www.wine4trade.com we found an offer to sell 20,000 bottles of XO at FRF27 per bottle. On the same site we found Distillerie de Moisan and Delpech-Fougerat offering their products including Pineau des Charentes, as well. At the much talk about site, their home base is in the Cognac region, www.pro-wine.com we found 301Cognac bottles on offer. At www.agrifirst.com there were none. But the wine volumes are impressive on those sites. So, we believe that Cognac, a by-product of wine, will show in volumes on various B2B markets in future.

Strike at Camus settled after a few days. Viticulteurs aggressive protest was mediated by Alain Philippe of BNIC (click for a photo from front page of Sud-Ouest 08/02/01). The January Communication letter from BNIC arrived. It reads like nothing new but around the globe travels and photo ops (neither Davos nor Porto Allegre, yet). Late item from January; Team Export at the BNIC stops producers from attending a meeting with the UK importers (Thursday, 18 January 2001, RAC 15:00) held in conjunction with an annual homage to France at Olympia 19-21 January and attended by over 30,000 visitors. Don’t ask why! Vive la France!

Patrick Ricard, CEO of Pernod-Ricard (parent of Martell, Bisquit, Renault Cognacs) said: "And you can see we are close to the second company, so that’s a good challenge for us to become the second (biggest) relatively quickly,". This was said recently during the visit in Montreal to discuss their purchase of 39% of Seagram’s assets. A French Chief Executive sounding like an Anglo-Saxon CEO might mean that the partnership with Diageo has rubbed off in more than one way. The story out of Pernod-Ricard is one of completely focussing on the main brands (i.e. they are finally to sell Orangina), disposing of minor shareholdings (i.e. Societe Generale) and striving to become the AVIS of spirits business. A good strategy that will be felt at the Allied Domecq, the present number 2 (parent of Courvoisier Cognac). At least for the moment, than maybe watch out Diageo, the current No. 1. (National Post 30/01/00)

The 8^th Cognac Blues Passions Festival will be held during 26 to 29 July 2001 in Cognac. This edition, titled "on the road to hell…", marks the debut of the new director Bertrand Liocourt under a watchful Presidency of Clairette Bord. For more check www.bluespassions.com

In the recent interview "Whisky people" in the Whisky Magazine issue 14, Charles MacLean asked Norman Shelley, The Perfect Collector: "What is your favorite drinks, as well as the Macallan?" Norman Shelley answered: I love Louis XIII cognac and among The Macallans I drink 18-year-old…"

Since Japan was the theme of the recently concluded Comics Festival in Angouleme, it was not surprising to find Hennessy Cognac as its co-sponsor. Since early last year, Hennessy Cognac has worked hard on reviving Cognac fortunes in Japan. This participation, extended to 5 years, follows their Japan strategy, which brought improved financial results recently. And of course, Pure White, ice and comics or Paradis, cigars and comics are said to go well together. See our item dated 31/01/01. (Sud-Ouest24, 30/01/01)

Last weekend some 300 producers of Pineau des Charentes celebrated St Vincent day with a dinner dance at St Laurent de Cognac. Among the friendly and convivial atmosphere, the next generation of producers was clearly missing.

A label from this red Cabernet Sauvignon Vin de Pays Charentais explains the year, that it is a French product and then comes this wonderful mish mash of confusing information. Click here to read it. "Domaines Remy Martin proprietaire a Saint-Meme-les-Carrieres" – this simply says that Domaines Remy Marttin is the owner in department 16 where Saint-Meme is located (in the center of Grande Champagne). "Mis en Bouteille au Domaine par J. Lebegue a 33330 France." – this part simply says it was bottled at the Domaine by J. Lebegue in Bordeaux region of Department 33. The little code at the bottom right tells us that it was bottled in Libourne. What does this all mean? That vin de pay Charentais travels well from Grande Champagne to Libourne for bottling? Simplicity, please!

In a subtle but making perfect business sense, Jean-Michel Naud, President of Distillerie de la Tour, has adjusted the bulk production landscape in the Cognac region by acquiring controlling interest in Domain du Chillot from the German company Asbach. Distillerie de la Tour with 40 employees, turnover of over US$30 million is beginning to build a major influence in the Cognac region bulk scene activities. Their only commercial Cognac is bottled under the label of Alain Delon for exclusive distribution in Japan. Consolidation is good for the region and we should see more of it in the coming months. (Sud-Ouest30/01/01)

Not that we can see; latest financials met expectations, executives voted themselves major incentives which are not related to performance and share price hobbles in a no man’s land. In the meantime when it comes to Cognac (Courvoisier); their main competitors keep gaining market share; Hennessy, Martell and Rémy Martin. (Financial press 27-31/01/01)

Our story of 30/01/01 "Playing with words and the meaning of age" solicited a number of emails. From Claire Coates of BNIC comes the most appropriate sentence: "To understand better you have to read it all." So click here and read it all http://www.cognac.fr/web_bnic_en/htm/cognac_conso_etiquette.htm

Thank you all for emails but we will stick to simplicity in our definitions for VS and *** as the youngest of the eaux-de-vie in the blend must be 2.5 years old.

20 May 2001