Why do Cognac Houses Have Sub-Brands of Cognac?

In a previous post, I was commenting on how common it is for Cognac Houses to have multiple brands of cognac. In marketing & Brand Management, this is called the multibrands strategy. There are many reasons for this, here are a few:

As the company grows they start being distributed everywhere and they often have exclusive agreement for territories. Along with this, they make new and wider relationships, and they cannot satisfy the opportunities offered through these new distributor relationship in the same areas where they have already agreements. Hence, the need/ opportunity to develop sub-brands.
Also as the business grows they may acquire other houses along the way and this explains the multi-brands.
They may want to cover a wider target market and thus require multiple brands.
It may be a competitiveness plan, such as based on cost leadership. No brands does it all.

This multiple cognac brands situation is not common among the ‘big four’ cognac houses. Or rather not anymore, since Hennessy let go Cognac Davidoff last January 2011 to its competitor Thomas Hine & Co. Davidoff is a brand mostly associated with cigars. Founded by the Davidoff’s family when they moved to Geneva Switzerland in 1911, and brought to an international fame by Zino Davidoff (son).

Cognac Paradis Cognac Davidoff

Davidoff is a brand owned by the The Oettinger Davidoff Group whose business is mostly into cigars and managing licenses of its trade name to specialized producer. The way I look at it it makes more sense that Cognac Davidoff be produced by someone else than Hennessy. Hennessy should not be tied to any other cognac brands and stand alone. They do not need to and they should not. That is not to say that this is also not true for Hine, but it makes more sense that Hine be in charge of this. Hine is a much smaller house of cognac than Hennessy, and it makes more sense that Davidoff be a small special offspring of Hine rather than Hennessy. Hine is such a distinguished cognac House, everything about it is ‘neat’!

www.zinodavidoff.com