High spirits in cognac

A decade ago, the brandy industry was on its knees. Now, from Los Angeles to Beijing, it is the most in-demand drink in the world, and those who make it are feeling a very warm glow

A decade is just a drop in the barrel of the four centuries which have distilled the rich and, surprising, history of cognac.

All the same, some decades, like some cognacs, are more momentous than others. In 1998, the small town of Cognac in south-western France, was, literally, under siege. Angry vineyard owners blocked all approach roads with piles of burning tyres.

A brandy surplus equivalent to two years' global sales – a cognac sea, rather than a lake – was piled in and around the town. The big cognac companies – Hennessy, Martell, Rémy Martin and Courvoisier – had suspended their purchases of eau-de-vie, or "raw" young brandy.

Cognac, arguably one of France's greatest gifts to humanity, had lost ground in its homeland to a fashionable taste for whisky. Some important foreign markets had collapsed. Growers were being paid to rip out their vines.

Ten years later, cognac is no longer on the rocks. Sales of the world's favourite brandy smashed all records last year. More than 158 million bottles of cognac were sold in 2007, nine out 10 of them outside France and more than one in three in America. This was the sixth successive year in which the world's thirst for cognac has grown.

The abrupt change in fortunes is explained by a cocktail of global trends, some predictable, some surprising. They range from the emergence of a vast, cognac-quaffing, Chinese middle class to the establishment of cognac as one of the principal icons of American rap music. Last year, two symbols of quality and conspicuous consumption jostled with sex and guns as the principal subject for US rap lyrics and titles. Cadillacs came first. Cognac came a close second.

In the small town of Cognac, and the large brandy-producing region which surrounds it, burning tyres and angry placards are now just a memory. Small wine-producers in much of the rest of France bemoan global competition and a world-wide glut of cheap wine. Cognac producers are, cautiously, celebrating the arrival of a global economy (and praying that the US and Asia are not heading for a recession).

Patrick Brisset, 49, is a cognac producer in the pretty village of Saint Preuil, just east of Cognac. His family has been growing grapes for brandy-making for 340 years.

"The cognac crisis in 1998 was a false crisis, a pseudo-crisis," he said. "Nature is bountiful, especially the vine, but mankind is not always reasonable. When times were good in the 1990s, we simply produced too many grapes and too much cognac.

"But the crisis was never going to last. Anyone with a little common sense could have seen that cognac was perfectly placed to benefit from the globalised world which was just beginning. Until a few years ago, cognac had more name recognition in China than Coca-Cola."

Here is another surprise. Cognac, symbol par excellence of French savoir faire and French art de vivre, was one of the first "global" products. It was invented in the early 1600s by the Dutch, based on methods of wine distillation borrowed from the Middle East, by way of north Africa. It was refined by the French and commercially developed by the Irish and British. Cognac was already a global brand when Atlanta, home of Coca-Cola, was still a swamp.

The taste for cognac in Asia is an especially old story. French traders loaded a sailing ship with cognac almost 200 years ago and successfully made the rounds of east Asian ports. Ever since, cognac has been a status symbol in China. One of the most prestigious presents at Chinese weddings is a bottle of Hennessy or Courvoisier or Martell. For decades, few Chinese could afford cognac. Now tens of thousands can.

Cognac exports to China increased by 73 per cent last year. If you include sales shipped through Singapore, China has now overtaken Britain as the second largest consumer of cognac, after the US.

The unlikely connection between cognac and rap music is more recent. In 2002, Busta Rhymes reached the top five of the rap charts in America with a song called "Pass the Courvoisier". Six years later rap lyrics are still littered with references to "yak" – slang for Cogn(yak) – and Henny – slang for Hennessy.

Mixed with everything from Coca-Cola, to beer, to pineapple juice, or swigged straight from the delicately crafted bottle, Cognac has become the drink of choice for rap performers and their fans. Courvoisier reported a 50 per cent jump in its American sales after Busta Rhymes took the name of the label to the top of the US charts.

However, the love affair between cognac and black America goes back much further. In the 1950s, two legendary jazz performers, Herbie Hancock and Wayne Shorter, formed a quintet called VSOP. (When cognac is at least four years old it is known as Very Superior Old Pale or VSOP. Two-year-old cognac is VS or Very Special. Older cognac is XO or Extremely Old.)

M. Brisset believes that the cognac-black America connection goes back to the Second World War. During the liberation of France, American soldiers were often given a long-hidden bottle of cognac by grateful French farmers. "Black GIs were used to being treated as second-class soldiers by the US Army. They were astounded to find that they, too, qualified for a free bottle of brandy," M. Brisset said.

As a result, cognac became a favourite drink of the black Americans who could afford it. Rap stars have passed on the taste to a new, and often (but not always) wealthier, younger generation of African-Americans.

Hennessy, the most popular cognac brand in America, with more than half of the market, estimates that young blacks now buy 60 per cent of all the bottles it sells in the US.

Isn't the cognac industry a little wary of a connection with music whose lyrics are often accused of promoting violence and brutal attitudes towards women?

"We respect all our customers," M. Brisset said. "I like to think that rap stars are attracted to cognac, not because it is a symbol of luxury, but because they recognise that it has extraordinary quality."

It is fair to say, however, that the cognac industry is a little schizophrenic in its attitude to rap. Officials are quick to point out that many white Americans also drink cognac and that the steady growth of cognac sales in the US – up 13 per cent again last year – began long before Busta Rhymes asked people to "Pass the Courvoisier".

All the same, when you log on to the official website of the cognac industry trade body – the Bureau National Interprofessional du Cognac (BNIC) – the sound that you hear is not accordion music, or Johnny Hallyday or Edith Piaf. It is rap, followed by jazz. Chinese heavy metal, or ethnic han music, will presumably follow. There is, however, a further explanation for cognac's boom in the globalised world: an explanation that might cause French wine traditionalists to ponder the plight of the country's middle and low market table wines. Eighty per cent of cognac is blended and marketed by the four biggest, instantly recognisable brand names: Hennessy, Rémy Martin, Courvoisier and Martell. These companies belong, in turn, to large drinks or luxury goods companies. Hennessy, for instance, is part of Louis-Vuitton-Moet-Hennessy (LVMH).

By contrast, French middle-market wines are marketed under hundreds of different labels, upholding the noble, national tradition of wine-making and bottling by small producers or traders. This is, according to your viewpoint, the magic of French wine or a marketing calamity. Top of the range French wines do well everywhere. But the only other French wine region which is doing universally well is Champagne. This, like Cognac, is dominated, not by the labels of small producers, but the brands of a half-dozen big blenders and traders. Is that just a coincidence?

Ten years ago the cognac producers on the tyre barricades were convinced that they had been "sold down the river" by the big multinational drinks and luxury goods companies, which had bought up the big, old cognac houses. The protesters accused them of being more interested in their other, more trendy products, such as vodka or whisky.

"That fear has proved not only to be unfounded but the opposite of the truth," said Jérome Durand, director of marketing at the cognac trade body, the BNIC. "Having the clout and the marketing expertise of these big multinational companies, as well as a handful of strong brand names, has been a huge advantage for cognac. It is one of the factors which has made cognac successful while French table wines have lost ground."

Cognac sales are still sluggish in France and Britain (the third and fourth largest markets). The industry hopes that a gathering trend towards drinking cognac long – as an aperitif or cocktail – will change all that. Last week, the cognac industry organised its first "cognac cocktail summit", and invited the most celebrated drinks makers and shakers from all over the world.

Rather than compete, they were asked to collude in the invention of a new cognac cocktail. They came up with "the summit" – a mixture of cognac, fresh ginger, cucumber, green lemons and mineral water. M. Durand insisted that I should try one. It was, I must report, sensational.

Drinking cognac long, rather than short, is a return to its origins. The double distillation of white wine to produce brandewijn (burned wine) or "brandy" in the Cognac area was invented by the Dutch in the early 1600s. Officially, distillation helped the wine to travel better. Unofficially, it reduced the cost of shipping.

Wine is largely water. Rather than ship French water expensively to Holland, the wine was double-distilled into brandy. Dutch water could be added on arrival. Thus, accidentally, an icon was born.

The booming world thirst for champagne threatens to cause bubbly shortages, and high prices, before new champagne vineyards come on stream in 10 or 15 years. What about cognac?

There is plenty of room to expand production. In the medium term, there should be no big problem, even if last year's poor, mildew-ridden summer, reduced the 2007 grape harvest. (Cognac is mostly made from ugni blanc grapes. They produce an acidic, low-alcohol white wine which is undrinkable, but perfect for distillation.)

Cognac prices in the shops have not yet been pushed up. All the same, the industry's main trade body says that it will take "vigilance" and careful planning to prevent shortages and price hikes, in the future.

There is already a scarcity of barrels of cognac which have been aged for four years and more. The wholesale price of 10-year-old, generic cognac – a key ingredient in the sophisticated, "XO" or "Napoleon" blends – has doubled in the past year. This was, ironically, the cognac which was distilled in the year of barricades and burning tyres.

Rising prices for this old, unblended cognac might well begin to force up the prices of XO brandy. Such bottles already sell for around £100 a bottle. Even older brandies in crystal bottles can sell for up to £3,000.

There is, therefore, no particular reason to pity the consumers, whether they are wearing blazers in yacht clubs or bling in nightclubs.