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Festive brandy and cognac packaging can boost year-end sales.

Retail sales are looking rosy for this holiday season, say many financial experts. A combination of lower gas prices, an improved labor market and rising home values has helped U.S. consumers feel more confident about the economy and more willing to open their wallets. Brandy and Cognac brands are ready to entice them with seasonal high-end limited releases and fancy gift packs, supported by holiday-oriented advertising, marketing and in-store displays and POS.

This year's Retail Holiday Sales Forecast by Deloitte predicts a 4% increase in spending over last year. Also bullish on year's end in the National Retail Federation, which expects sales in November and December (excluding autos, gas and restaurants) to increase a solid 3.7% to $630.7 billion--significantly higher than the 10-year average of 2.5%.

Those forecasts bode well for brandy and Cognac. "Historically and traditionally, Cognac has been offered as a gift across different cultures," says Benjamin Bourinat, a spokesperson for the Cognac Board. "The uniqueness of Cognac has always made it a luxury item. Brands and retailers can tap into this positioning to continue creating ultra-premium editions and upscale bottlings."

The U.S. is the number-one market for the French brandy, with 63 million bottles shipped over 2014-2015. American brandy accounts for 59.4% of the category, according to the Beverage Information & Insights Group. All told, domestic and imported brandy garner a healthy 5.2% share of the distilled spirits industry in the U.S.

"Brandy and Cognac sales really pick up during the holidays," affirms Peter Herlofsky III, wine manager at Liquor Boy Wine & Spirits in St. Louis Park, Minn. And customers are generally feeling more generous, spending a little more than usual and trading up in quality. "Holiday sales are on the more premium end of brandy and

Cognac, especially Cognac," he adds. "When they get invited to somebody's house, instead of bringing over a bottle of E&J Brandy like they normally would, they'll bring over some Hennessy Cognac. Or go even more premium for a good friend." Cognac sales spike in the last few months of the year, Herlofsky says.

Indeed, many Cognac houses report that year-end sales are big business. "The holiday season is important to us; the fourth quarter accounts for around 45% of our yearly business," says Jean Denis Voin, executive vice president of CIL U.S. Wines & Spirits, the American subsidiary of the family-owned Cognac firm Camus.

"The holiday season is big for Cognac. Courvoisier, and the category overall, see a much higher sales rate in the fourth quarter and we expect this year to be no exception," says Neil Shah, senior brand manager, Cognac at Beam Suntory.

Domestic brandy fares well during the holidays, too. "The holidays are by far the most important time of the year for E&J, with over a third of annual sales coming from the fourth quarter," says Gerard Thoukis, senior director of marketing for E. & J. Gallo Spirits.

Retailers echo that sentiment. "Cognac and brandies have a nice following around the holidays," says Jeff Kreston at Kreston Wine & Spirits, with two stores in the Wilmington, Delaware area. "It's a nice gift option if people don't know exactly what they are looking for. And they are usually in a good price range."

Do the Nog

Holiday brandy purchases are not just for gifts, says retailer Kreston. Mixing up big batches of homemade brandy eggnog is a long-standing tradition in the Delaware area. "Folks buy the good stuff for their old family recipes," he says. "We special order some brandies and Cognacs around the holidays just for that purpose."

Although Christian Brothers Brandy doesn't offer any VAPs or other holiday promotions, its seasonal Christian Brothers Holiday Nog is a big seller this time of the year, says Josh Hafer, communications manager at Heaven Hill Distilleries. "The brandy-based dairy nog is one of the best-selling nogs in the business," he adds.

Heaven Hill also celebrates the season with Evan Williams Eggnog and recently introduced an Admiral Nelson Eggnog. The company supports stackings with case cards and counter displays by the register. "It is a great grab-and-go item," Hafer says. "With a price point of $7.99-$8.99, you add to your buy without deflating the wallet too dramatically."

"Besides the gift sets and snifters, we sell all different variations of brandy this time of year," notes Herlofsky, citing Christian Brothers Holiday Nog and E&J Cask & Cream Original Temptation Brandy Liqueur.

Not quite Scrooged

Not every producer is sold on selling the holidays, however. Some are opting out of the gift pack race and looking to make brandy less of a special-occasion buy and more of an everyday quaff.

Pierre Ferrand Cognac, for example, is not planning any holiday promotions or issuing any gift packs. Indeed, the brand is de-emphasizing that year-end bump. "We are trying to reduce high fourth quarter seasonality as much as possible," explains Guillaume Lamy, vice president-Americas for Maison Ferrand. "Our Cognac volume sales used to be 60% during that time, now it's closer to 40%."

Christian Brothers Brandy, too, has opted out of the fray. "For domestic brandies, those are year-round consumers," says Hafer. "We don't see much of an uptick in sales because of the holidays."

"Brandy is not as seasonal as people think, "opines Heron at Copper & Kings. Sales are spread out fairly evenly across the year, he says. "We do not focus on special occasions. We focus on the consumption opportunities from seasonal mixology-like highballs in summer, Corpse Reviver for Halloween or Jack Rose for fall."

"We do not do any specific holiday promotions on a national level, but maintain a consistent brand presence throughout the year," says Vicky Arcos, brand director at Paul Masson. "Paul Masson Grande Amber Brandy has maintained a consistent presence in the domestic brandy segment and has been very consistent in sales throughout the year as the number-two brandy, with a 21 % share of the domestic brandy category. So while the fourth quarter is important, our sales are not reliant upon holidays."

Encourage the Splurge

Consumers are primed to spend during the holidays; the trick is to get them to open their wallets in the store. For retailers, that means start early, taking advantage of VAPs and other tools from producers and distributors, refreshing shelves and displays and creating a festive atmosphere in the store. Take advantage of sampling to gain trial and, most importantly, educate and motivate staff to hand-sell.

"Right now we are figuring out what's going to be on the floor and how to dress it up to look attractive and festive," Kreston says. He is also deciding about his pricing strategies and printing up shelf talkers rather than relying on hand-written signage. Early on in the season, Kreston's will run a few one-day sales for customers who are already in the mindset to buy for the holidays. "They can drink their purchases right away or save them for the holidays; wine and spirits never go bad," he notes.

Beyond the floor displays, a number of brands offer installations (where legal) to help retailers spruce up for the holidays. For example, each year E&J Brandy offers a holiday-focused display piece, Thoukis says. This year it is a fireplace that "flickers" when customers walk by.

When it comes to gift packs, be sure to offer a range of price points to fit every pocketbook. Not just the fancy bottle of XO, but VSOP and VS, as well. Special services can be a bonus too. Kreston offers free gift wrapping. And Hennessy has extended its engraving program nationally, allowing customers to personalize their Cognac gifts.

"Hand-selling is key," says Herlofsky at Liquor Boy. Most customers are not used to spending $75-$ 100 for a bottle of Cognac. "They want to know that they are getting their money's worth and feel comfortable with their purchase," he explains. It is also a situation for upselling--if the salesperson can clearly explain the difference between, say, Cognac blends from Grande Champagne versus Borderies.

"The staff has to be knowledgeable and stores have to make an investment in education," insists Herlofsky. "You need to make that personal connection, which often times is what keeps customers coming back."

BONUS PACKAGE

The holiday stars are value-added packs (VAPs), those classy gift sets of a bottle and logoed glasses, mixing kits, flasks or other paraphernalia, along with limited-release brandies in fancy bottles in wooden boxes, metal tins or other ornate cases. The festive packaging stands out on shelves, in stacks and on floor displays, and calls out to customers at the checkout counter. For harried holiday shoppers, VAPs are an easy gift decision. No wonder then that many brandy producers have one or more entrants.

Holiday packs from Copper & Kings American Brandy Co. include the Butchertown Bloody "Meatpack," which includes a bottle of brandy along with a pint glass to make a brandy Bloody Mary. "We also have a 'Hitchhiker' program, where a 50ml bottle will sidecar with a 750ml bottle," says owner Joe Heron.

American Craft Brandy will come with a small bottle of Absinthe Banche and the absinthe will include a craft brandy 'hitchhiker.' Copper & Kings is supporting the VAPs with display racks and sampling in key stores. Also, the distiller just launched an American Apple Brandy aged in Bourbon barrels and sherry casks at 100 proof. For the holidays, the company will also launch a reserve cask Butcher-town Brandy at 124 proof.

Martell Cognac has released a VS0P gift set packaged with two snifters for the October-December period. But it's not holiday specific, says Brian K. Smith, senior brand manager, Cognac at Pernod Ricard. Also launching now to run through next June is The Vanguard Series, a partnership with legendary band The Roots. Taking place in key cities nationally, the six-part series includes live concerts, DJ shows, culinary events and, of course, samplings of Martell Cognac.

"Gift packages are a way to get extra visibility during the very busy holiday period," notes Voin. Camus offers gift sets that include two glasses for its VS, VSOP and XO Cognacs. Each year the designs are different; this year they jibe with a new advertising campaign, called the Perfect Cognac Moment. The ads are fashion illustrations of party scenes at the Camus chateau in Cognac. Support for the gift sets includes in-store posters, case cards and ceiling hangers. The three facings when stacked together in the store create a complete image of the chateau in Cognac.

For its part, Hennessy has many items created especially for the year-end, unveiling new offerings for its X.0, V.S.0.P Privilege, and V.S expressions, according to executive vice president Rodney William. The Hennessy X.0 gift box features elegant metallic printing and embossing on the box and a unique black label on the bottle. The Hennessy V.S comes in a gold and black gift box with a festive quilted pattern.

"We will be offering gift sets this holiday season that include our Courvoisier VSOP cognac along with luxurious glassware, and recipe suggestions," says Shah at Beam Suntory. "A new marketing campaign brings to life collaborations between French and American artists, celebrating their stories and the immense passion that goes into their crafts," he adds. Details on the campaign were not available at press time.

THOMAS HENRY STRENK is a Brooklyn-based freelance writer with over 20 years experience covering the beverage and restaurant industries. In his small apartment-turned-alchemist-den, he homebrews beer kombucha, and concocts his own bitters and infusions.

LEADING BRANDS OF BRANDY & COGNAC, 2013-2014 (9-LITER CASES)

BRAND                    ORIGIN                SUPPLIER

E&J                         USA        E&J Gallo Winery
Hennessy                 France       Moet Hennessy USA
Paul Masson Brandy          USA    Constellation Brands
Christian Brothers          USA      Heaven Hill Brands
Remy Martin              France      Remy Cointreau USA
Courvoisier              France            Beam Suntory
Korbel                      USA       F. Korbel & Bros.
Coronet Brandy              USA      Heaven Hill Brands
Salignac                 France            Beam Suntory
St. Remy                 France      Remy Cointreau USA
TOTAL LEADING BRANDS
OTHERS
TOTAL BRANDY & COGNAC

BRAND                      2013      2014   '13/'14
                                              % CHG

E&J                       3,150     3,135     -0.5%
Hennessy                  2,390     2,575      7.7%
Paul Masson Brandy        1,345     1,560     16.0%
Christian Brothers        1,135     1,156      1.9%
Remy Martin                 621       626      0.8%
Courvoisier                 412       440      6.8%
Korbel                      325       298     -8.3%
Coronet Brandy               88        88      0.0%
Salignac                    104        87    -16.3%
St. Remy                     87        80     -8.0%
TOTAL LEADING BRANDS      9,657    10,045      4.0%
OTHERS                    1,038     1,025     -1.3%
TOTAL BRANDY & COGNAC    10,695    11,070      3.5%

Source: Liquor Handbook 2015. For more information,
visit www.bevinfostore.com.
COPYRIGHT 2015 Bev-AL Communications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2015 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Deck the Aisles
Author:Strenk, Thomas Henry
Publication:StateWays
Date:Nov 1, 2015
Words:2096
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