The choice of a new generation

Cognac is making a comeback. After a decade of decline, sales of the world's most prestigious spirit have swept upward in the past 18 months.

While scrupulously maintaining brandy's role as an after-dinner drink for old fogeys, the producers have assiduously begun courting a new generation of young drinkers, who will mix cognac with anything in search of a new sensory sensation. Ironically, this trend, which began spontaneously in the nouveau riche markets of Asia and North America, is being imported to Europe by the producers, who are pandering to the consumer with new "light" cognacs designed to be mixed with Coca-Cola, tonic water, fruit juice and so on.

Hennessy, the biggest of the producers that line the banks of the river Charente in the quaint stone town of Cognac near the west coast of France, launched a radically different cognac, called Pure White, in 1999. Sales of Pure White, blended for use as a mixer in long drinks, are said to be progressing well in the US, France and Germany.

Chasing the same clientele, Rémy-Martin, the second-biggest producer in 1999 with 1.4 million cases sold, launched Rémy Silver, a mixture of cognac and vodka, and Rémy Red, a blend of cognac and red fruit. Martell, one of the Seagram assets just acquired by Pernod Ricard in its $8.15 billion (£5.5 billion) share-out with British drinks group Diageo of Vivendi Universal's spirits business, is treading the same path.

After seeing its sales decline from 1.5 million cases to 1.2 million cases in five years, Martell has invested £2.5 million in its biggest-ever publicity campaign, again designed to seduce younger consumers.

Christophe Navarre, Hennessy's Belgian chief executive, says that in the US, consumption has undergone a revolution. "For Hennessy, worldwide, 80% of our cognacs are drunk mixed, with ice, ginger ale, tonic, soda and so on," he says. "We invested hugely in promotion in that market."

There seems little doubt that the new marketing line - combined with economic recovery in Asia and a hitherto strong US economy, has helped cognac stem the ebb tide. The Bureau National Interprofessionnel du Cognac says that shipments, which declined from 15.2 billion bottles in 1990 to 11.1 billion in 1998, are back on an upcurve. Shipments recovered to 11.3 billion bottles in 1999 and growth is ex-pected to have accelerated last year.

This year's figures will be keenly watched for signs of recovery in Britain, the second-largest cognac market in the world after the US. While Americans drank 35.8 million bottles of cognac in 1999, Britons consumed 11.1 million - down a whisker on the previous year but still making the UK a larger market for cognac than France itself, where only 7.4 million bottles were consumed.

The reasons are partly historical. Cognac has been an export product for centuries, and today almost 92% is sold abroad. Hennessy, which in 1999 shipped 2.9 million cases, almost a third of total consumption, was founded in 1765 by Irishman Richard Hennessy, a former captain in the army of Louis XV.

He targetted overseas markets from the outset, realising that cognac, cut with water, would taste better than wine that had spent months pitching and rolling in the hold of a sailing ship. It was only in the early years of the 20th century that long-matured cognac became the vogue, as the phylloxera plague devastated the region's vines, halting production, and connoisseurs made a virtue of necessity by drinking old stock.