When Ansley Coale began making Germain-Robin brandy in the early 1980s, the U.S. market was hardly ripe for the spirit. While Germain-Robin garnered praise from critics, it didn’t gain widespread consumer acceptance. But that situation may be finally changing. “After 30 years in the desert, suddenly everyone is paying attention to American brandies,” says Coale, cofounder of Germain-Robin and president of Ukiah, California–based Craft Distillers. He isn’t alone in his assessment. “Lately, a lot of people have started noticing brandy,” says Jeanine Racht, national sales manager for Portland, Oregon’s Clear Creek Distillery, adding that the recent surge is a case of history repeating itself—albeit not a recent history.
Volume remains small for all but the big four American brandies—E. & J., Christian Brothers, Paul Masson and Korbel. But the dynamism surrounding the smaller players—mainly craft brandies—has the industry taking notice. Brian Bowden, senior vice president and general merchandise manager for spirits, beer, tobacco and beverages at BevMo, says he expects to add more artisanal brandies to the chain’s offerings next year. “We have seen an increase in all our American brandies, from everyday labels like E. & J., Korbel and Christian Brothers to more artisanal brands, such as St. George and Clear Creek’s fruit brandies,” Bowden says. “We’ve been increasing our craft selection of brandies, and the core selection has remained stable.”
The dynamism surrounding certain brands is driven by new consumer adoption. While American brandy’s core demographic is the baby boomer and older market, millennials are driving a lot of the more recent growth. “Brandy has shifted to younger consumers,” Bowden notes. “They’re not really trading over to brandy, they’re just adding it into their cocktail choices.”
American brandy has had a solid consumer base for decades. In fact, sales rose fairly steadily through the 1990s and 2000s. By 2010, depletions had reached 7.23 million nine-liter cases, according to Impact Databank. Since then, the category’s performance has been uneven, although 2015’s volume exceeded that of 2010, hitting 7.33 million cases.
The top four American brandies account for more than 93 percent of the segment, according to Impact Databank. As category leader, E. & J. slumped slightly in 2015, but its volume rose 7.5 percent to 3.9 million cases last year, driven by its Peach and Apple extensions. Priced at parity with the 40-percent abv core brand, both flavors are 30-percent abv.
Indeed, 2016 brought a turnaround for the sector overall, industry executives say. “The main brands are doing pretty nicely right now,” says Josh Hafer, communications manager at Christian Brothers owner Heaven Hill Brands. Hafer adds that the big four are experiencing “some stability that they haven’t seen over the last couple of years.” Todd Kennedy, brand director for Korbel at parent company Brown-Forman Corp., says that even a hefty suggested retail price increase—rising from $13 to roughly $18 a 1.75-liter bottle—only temporarily destabilized the Korbel brand. “We were initially delisted by some major retailers because the price was going up by several dollars a bottle,” Kennedy says, noting that the increase was necessary due to rising grape and production costs. “Those retailers came back to us after four or five months.” He notes that the brand is now “selling like wildfire.” Nevertheless, Korbel’s volume dropped 3.7 percent to an estimated 289,000 cases in 2016, according to Impact Databank.
Migrating From Whiskies
Some industry executives say brandy’s rise in popularity is an extension of the surge in other brown spirits, including whiskies, and that growth is the next step in an ever-broadening repertoire of drinks. “Consumers are looking to go deeper into well-established brown spirits categories and to explore other options like brandy,” says Robert Ruijssenaars, vice president of marketing for the spirits business unit at E. & J. Gallo Winery. “Mastery of the distilling process and maintaining high standards will be critical to the category.”
Diana Pawlik, vice president of marketing for Constellation Brands, agrees. “With brown spirits trending overall, brandy is enjoying a halo, and with its approachable profile, it’s the perfect gateway to whisk(e)y,” she says. Constellation Brands owns the Paul Masson brand, which surpassed 2 million cases in 2016 on double-digit growth.
Demand for brandy is definitely increasing at Coquette, a New Orleans restaurant with a heavy emphasis on locally sourced ingredients, according to bartender Christopher Brian. He says offerings from regional producers—most notably Louisville, Kentucky–based Copper & Kings, whose brandies are aged in Bourbon barrels—are resonating with his customers. “Bartenders are talking about history, and there’s a story to tell with brandy,” Brian says. “Customers seem to have an affinity for aged products, and they ask for them.” Mike Jones, head bartender at Chicago’s Sable Kitchen & Bar, says the onus is on bar professionals to expand brandy’s reach. “We try to educate and help people understand a bit more of the beauty and purpose of brandy, as well as its versatility in cocktails,” he says.
There’s also more interest in small producers who are perhaps being edged out by the proliferation of whiskies and other craft spirits in the market. Dan Farber, founder and distiller at Soquel, California–based Osocalis Distillery, notes the market saturation of craft whiskies, vodkas and gins. “A lot of distilleries are turning to brandy,” Farber says. “Many of them hadn’t been making it before or had de-emphasized it.” Farber notes that the media and consumers are always looking for the next new thing, and brandy’s turn could be coming up. “These products have been around for a long time, but people like to rediscover things,” he adds.
Copper & Kings founder Joe Heron agrees. “Much more adventurous consumers have been the driver,” he says, noting that they’re typically younger than traditional brandy drinkers. “They’re going into bars and trying new things, and bartenders are looking for interesting ways to engage patrons.” He adds that brandy’s formidable history in cocktails makes it a logical choice for exploration.
The relative lack of craft brandy producers gives those currently in the game a head start. “You can make something from grain every single day, but fruit comes once a year,” Heron explains. The aging requirements for many brandies add another barrier to entry. “It takes four years to make brandy that can stand alongside good Bourbon or Cognac,” he says.
Many established producers say they welcome the competition. Lisa Laird Dunn, vice president of Scobeyville, New Jersey–based Laird & Co., says the recent launches of new brandies and apple brandies—which compete directly with the company’s flagship Laird’s Straight Apple brandy—are positive developments. “New brands are creating more visibility in the market and on the shelf,” she notes.
Part of brandy’s challenge has been its pricing in relation to Cognac or higher-end whiskies. The high-volume brands are at the opposite end of the pricing spectrum from Cognac, but craft labels often flirt with luxury pricing tiers. Todd Randall, vice president of St. Louis–based Randall’s Wines and Spirits, says consumers who buy American craft brandies are deliberately searching for them. “Certain customers come in looking for brands like Osocalis, Leopold Bros. and Copper & Kings,” Randall says. “They’re expensive—around the same price as a high-end Scotch or Bourbon.”
Germain-Robin is a big seller at San Francisco’s Blackwell’s Wines & Spirits. Owner Gary Blackwell carries a few domestic craft brandies like Germain-Robin, and he says consumers put them on par with Cognac. “The pricing is very similar, and people know what they’re getting,” he notes, adding that brandy can also be seen as a more economical choice for mixing.
“As Bourbon and rye whiskey start to become more expensive, I think people are considering other options,” says Percy Rodriguez, beverage director for chef Laurent Toroundel’s LT Hospitality. “American brandy at the current price point will get people interested in the style. Some of the stuff I’m seeing is really awesome and intriguing, but it’s still largely unknown.”
Brian of Coquette also notes the emergence of a middle tier for brandy. “For too long, the options were either Cognac, which is upwards of $40 or $50, or the cheap stuff for $8 or $9,” he says. “There was a gap of well-made brandies that could be put into cocktails. Now the mid-tier range—$20 to $40—is emerging.”
Heaven Hill’s Christian Brothers Sacred Bond brandy launched in early 2016 at a suggested retail price of $25 a 750-ml. bottle. “There hasn’t been an efficient cost-per-pour product that delivers on quality and backbone in the market,” Hafer says. Sacred Bond is a 50-percent abv, bottled-in-bond brandy—a style that Hafer notes has become popular as a base for cocktails.
Germain-Robin debuted an entry-level brandy, Millard Fillmore, earlier this year at a suggested retail price of $35 a 750-ml. bottle. Coale says the company has “very ambitious goals” for the brand. “The market goes from $10 or $12 to the cheapest V.S. Cognac with hardly anything in between,” Coale says. “Bars are looking for something they can afford to put into cocktails.” He expects further competition in the $20-to-$40 price point from both major producers and other craft distillers.
Building The Cocktail Culture
Brandy’s long history in cocktails dates back to pre-Prohibition days in the United States, but for many decades it’s fallen out of fashion. However, the spirit’s popularity seems to be returning, albeit slowly. “Cocktails continue to drive interest and awareness of spirits,” says Constellation’s Pawlik. “Brandy has benefited from this mixology trend. It’s increasingly being incorporated into cocktail programs with innovative flavor offerings and classic drinks like the Metropolitan and the Sidecar.”
Copper & King’s Heron says brandy is finally getting long-deserved recognition. “Many of the original classic cocktails were actually brandy-based,” he explains. “Bartenders are really starting to support American brandy as a base spirit for classic cocktails and inventive cocktails. Brandy has all the heft and structure you look for in a brown spirit, but it also has finesse and elegance.” Rodriguez of LT Hospitality, which operates the New York City restaurants L’Amico and The Vine, notes that brandy is a good substitute for most brown spirits in cocktails. “You’ve got to take a chance when you’re working on cocktails because there’s a lot of possibility and potential with what’s coming out,” he says.
In fact, there’s often confusion among consumers about what brandy really is. St. John Frizell, owner of the restaurant Fort Defiance in Brooklyn, New York, says brandy in America has “somehow become synonymous with liqueur,” a perception he seeks to change through educational efforts. Fort Defiance’s Marconi Wireless cocktail ($12) comprises Laird’s Straight Apple brandy, Carpano Antica Formula vermouth, Cocchi Torino vermouth and Peychaud’s bitters. Sable Kitchen & Bar is also expanding the availability and usage of American brandy. Bartender Chris Cavarra created the Last Stop, Old Town ($14), which includes Laird’s Straight Apple brandy, Buffalo Trace Bourbon, Punt e Mes vermouth, Boomerang cherry liqueur and Bittercube Cherry Bark Vanilla bitters.
Like whiskies, brandy often has added flavors. While peach brandy is an eau-de-vie distilled from peaches, peach-flavored brandy is a neutral spirit with added sugar and flavorings. Among brandies distilled from fruits other than grapes, apple brandy is by far the most popular. Additionally, less-common fruits are also distilled. Clear Creek Distillery, for example, makes brandy using a variety of fruit, including raspberries, cherries, pears, blue plums, mirabelle plums and even Douglas fir buds. Racht says retailers in Clear Creek’s home state of Oregon have been hugely supportive of the distillery’s selection, as have many bartenders.
Fruit-flavored brandies are most common among the major brands. Paul Masson features Peach, Red Berry, Apple and Pineapple variants, while E. & J. has Apple and Peach expressions, and Christian Brothers includes Peach, Apple and Honey offerings. “I don’t think domestic brandy is akin to the vodka market where any flavor works with a bright canvas,” Heaven Hill’s Hafer says. “You have to find the right flavors to work for the products, so we’ve been pretty judicious in our releases. We aim to transition existing brandy drinkers to another spirit with familiar flavors that they can either mix or drink straight. And many of these younger, millennial consumers are used to seeing variety in the products they enjoy.”
Most marketers agree that the outlook for brandy is strong, given the tailwinds currently behind the category. “We’re excited for brandy’s prospects, not just from a volume standpoint, but from an aging standpoint,” Hafer says. “We think flavors, craft and on-premise energy are going to build the broader category.”