Elbow to Elbow With Kyle Jarrard

A Cocktail of Cognac, Literature & Photography

By Kyle Jarrard, in the International Herald Tribune 

COGNAC, France: Russia may be the land of vodka, but it's an
amber alcohol from France that has sparked a Cognac Rush in the land of
hyper-rich oligarchs and aficionados.

And it's not just the very well-to-do in Russia who are driving this
phenomenon, it's the newly moneyed middle layers of society as well. These days,
no festive occasion is minus its eye-catching bottle of Cognac - crystal de
rigueur and nestled in a fancy chest - the older and more expensive the
better.

All of the Big Four Cognac houses are omnipresent in Russia. Hennessy leads
the way by far, with Rémy Martin, Martell and Courvoisier battling it out for
their share. In the thick of the fray are also many smaller houses, like Camus,
Delamain and Otard, each with its top-notch Cognacs.

Russia is the world's No. 7 market for Cognac, a rank it only recently
achieved after a long climb up the ladder. About 5.3 million bottles went there
in the year that ended in July, 49 percent more than the same period a year
before. Three-quarters of that is older Cognacs and the rest, younger grades. In
contrast to other markets, where entry-level Cognacs are rocketing, sales of
aged grades are rising fastest in Russia.

"Russia is a country that has always loved its alcohol," says Alain Philippe,
director of Cognac's oversight body, the BNIC. "So when you take that love for
alcohol, mix it with a lot of purchasing power, you get a lot of people looking
for high-quality products, and Cognac answers the call." In his view, "there is
no limit" to how much the market can grow.

Hennessy had its first sale in Russia in 1825, to a distributor in St.
Petersburg. Since the end of the Soviet Union, its presence in Russia has
expanded powerfully, with half the sales in Moscow, another portion in St.
Petersburg and the rest spread across the country.

All of Hennessy's grades have found solid niches in Russia. Bernard Peillon,
the house's president, says, "We're working the top end of the market, focusing
on businessmen and businesswomen, people with rising buying power. And as the
Russian economy grows richer and Russians gain more and more buying power, there
is going to be a tremendous geographic expansion of this market as well."

Peillon notes that Hennessy is eager for Russia to enter the World Trade
Organization because "barriers will fall, taxes will shrink and consumer prices
will decline," he said, adding, "Accessibility to our products will grow even
easier, and we'll be able to develop our brand quite rapidly."

Hennessy, meanwhile, is going after a modern clientele, Peillon says, the
new, sophisticated, highly educated consumer who covets fine products and
carefully seeks out the best. "You only have to witness the tremendous thirst
that Russians have for luxury products to know this is true - whether they're in
Russia or on the Riviera, skiing at Courchevel or dining in Paris," he says.

Hennessy's ultra-Cognac-dream is Beauté du Siècle, an ornate treasure chest
with, among other luxury items, a Baccarat decanter containing a blend of Cognac
whose oldest parts date from 1907. Only 100 are to be made and will sell for
€150,000, or $220,000, with delivery by a Hennessy board member in person. More
down to earth in Russia is Hennessy's Ellipse, a €7,000 Baccarat decanter with
an assembly of Cognacs dear to seven generations of Hennessy's master
blenders.

Rémy Martin also reports double-digit sales growth in Russia in recent years,
making the house the "strong No. 2 in the market," says Stephen Carroll, the
house's marketing director. "It is the super-rich in and around Moscow and also
the emerging middle class in Moscow, St. Petersburg and in the regions who are
really driving this market."

"Cognac was very popular in czarist times," Carroll says, "and Rémy Martin
first imported Cognac into Russia back in the 1890s. Under the Soviet Union,
brandy from Armenia and Georgia was very popular. But in the past few years,
fueled by a rapid rise in real incomes, consumers have been trading up to
imported Cognac. There's a reverence for the true Cognac flavor."

Rémy Martin's two top-selling high-end Cognacs in Russia are its XO, largely
Grande Champagne with a touch of Petite Champagne, which goes for €250, and the
Louis XIII, which combines an incredible 1,200 Cognacs, some of which are a
century old, and sells for about €2,000.

Martell's high-end gem is Création Grand Extra, in a bottle shaped like a
Roman arch. It is filled with Cognacs from the Borderies, for a fruity taste,
and from Grande Champagne, for spiciness, and sells for €300.

Lionel Breton, chairman and chief executive, foresees widespread growth for
Martell in Russia.

"This is a rapidly growing market to which we bring a whole range of Cognacs
- from VS to XO to the very oldest types - and we're well positioned. It's a
priority market for Martell. With our VS, we're focusing on those drinkers eager
to learn about Cognac. With the rest of our range, we appeal to people who have
money, people who covet top-quality taste, who like our bottles and our
international cachet."

Courvoisier is consolidating its spot among top brands in Russia, with sales
soaring 150 percent in four years. This year the house introduced a range of
high-end Cognacs to the Russians, the better to position itself in a market
where, it says, Cognac represents about a third of all imported spirits.

Most recently, Courvoisier debuted XO Impérial to promote "our deep
historical ties with Napoleon I and our two centuries of rich history," says
Jennifer Szersnovicz, the brand's public relations manager. The €220 Cognac is a
blend of the top three Cognac growths that are several decades old. It is
followed in age by Courvoisier's Initiale Extra, from Grande Champagne and the
Borderies, at €550; Succession J.S., in a limited edition of 2,500, which comes
in a replica of a lockbox owned by Napoleon and sells for €3,000. The summit of
the range is L'Esprit de Courvoisier, in a Lalique decanter, a blend of the
oldest Cognacs the house possesses, for €5,000.

Camus vaunts one of the oldest relationships with Russia. Cyril Camus, its
president, says, "We were the official supplier to the czar, then market leader
during the Soviet era, and so today we have the privilege of having a client
base that wants our kinds of Cognacs, ones that are rich in tradition, unique in
style and based on five generations of know-how."

Camus's high-end offerings in Russia include its Vintages: single-year
Cognacs selected from the period 1962 through 1989. One especially stands out,
Le Pionneau 1969, which sells for €2,700. The house also offers its Jubilee
(€2,000), Extra Élégance (€550) and XO Borderies (€335).

Delamain is a smaller player, but Russia is its No. 1 market. This Grande
Champagne specialist has just produced the ultimate "Voyage," a leather gift box
with a Baccarat decanter of some of the house's oldest Cognacs. Price: €7,500.
About 175 of them have gone to clients in Russia.

Otard is going after the 30- to 50-year-olds, in Moscow mostly, with a wide
range, from VS to 1795 Extra, priced from €60 to €575. Lhéraud and Meukow are
two other important houses.