Scotch Whisky Overtakes Cognac as the World’s Leading ‘Status’ Spirit; Mezcal and Tequila Make Big Gains

(Photo: Klaudia Radecka/NurPhoto via AP)

According to new data from the International Wine and Spirits Record, scotch whisky has overtaken cognac as the world’s most valuable “status” spirit. Apart from consumer habits, the change can be attributed to economic trends currently crashing down on the French brandy market.

Status spirits, commonly known as premium or ultra-premium products, are defined within the report as any bottle that costs over $100. The definition leaves quite a bit of leeway. Anything from a $200 duty-free purchase to a $5,000 collector’s piece could technically be lumped under the umbrella.

No matter how you cut it, scotch emerged as the clear winner on all fronts. The scotch market reportedly rose by 17% in 2023 thanks to the popularity of malt and blended whiskies, of which more than 340 new products were released last year alone. By 2028, IWSR predicts that Scotch sales will add over $2 billion in value to the market.

Cognac wasn’t quite as lucky. The category fell by 12% in 2023, pushing it down to second place for the first time since the report’s creation.

Thousands of tractors flooded the streets of Cognac, France on Sept. 22 in protest of trade tensions with China. (Photos: AzPost/Youtube)

The main culprit lies in an ongoing trade war with China. During the autumn of last year, the European Union announced an anti-dumping investigation into “artificially low” Chinese electric car subsidies; in retaliation, China threatened tariffs on brandy imports. As of Oct. 8, those tariffs have been enacted. The move has proven catastrophic for French cognac producers who generate over $1 billion per year from the Chinese market.

Other issues may lie in changing tastes. Scotch and cognac are unique among high-end spirits in that they’re both largely defined by a single brand. At least, in the eyes of consumers.

Johnnie Walker sold 22.1 million cases in 2023, outpacing the total sales of the second-, third- and fourth-best-selling scotches (Ballantine’s, Chivas Regal and Grant’s) combined. Hennessy, meanwhile, is uniquely synonymous with the popularity of cognac, regularly beating out heavy hitters like Martell, Rémy Martin and Courvoisier.

In practice, this means that the cultural cachet of one brand can spell out the fate of an entire spirits category. The Atlantic wrote an excellent piece in 2022 pointing out that mentions of “Hennessy” have dropped precipitously in music lyrics over the past few years. Consider it a pop culture litmus test. Hennessy-owner LVMH has continued to report declining sales of its flagship product, spelling out a dire future for the cognac category as a whole.

Elsewhere, agave spirits are moving in on the opportunity. High-end tequila sales reportedly showed double- and triple-digit growth in every market except Russia in 2023. The biggest breakout of all was mezcal, which grew 73% from a low base.