Pernod undaunted by Ballantine’s challenge
Pernod Ricard has a good record of turning brands around, and is likely to need all that experience to revive the flagging fortunes of ex-Allied Domecq Scotch whisky Ballantine's. Brand director Peter Moore made no bones about the task facing the company when he discussed the brand's future with Dean Best.
The carve-up of Allied Domecq threw up a number of questions - not least what Pernod Ricard would do with the UK group's flagship Scotch whisky Ballantine's.
How would Pernod embark on revitalising a brand that had found the going tough under Allied's stewardship? And just how would the French drinks giant position Ballantine's alongside its own Scotch Chivas Regal?
When it comes to reviving ailing brands, Pernod has an impressive track record. The company deserves much credit for turning around Chivas and Cognac brand Martell, two products that were in trouble when they were bought from Seagram in 2001.
Pernod admits that Ballantine's has problems of its own and that a lot of work needs to be done to revive the brand across the range. Under Allied, Ballantine's brand image, and particularly that of Ballantine's Finest, had suffered. Successive marketing campaigns for Finest failed to connect with consumers, which spelt trouble in a standard blends category that has been flat at best in recent years. And with Finest accounting for almost 90% of Ballantine's volumes, a fresh image is vital.
"We are facing some challenges and we're not going to try and pretend we aren't. The overall picture in the standard segment is quite static," says Peter Moore, brand director for Ballantine's at Chivas Brothers, Pernod's whisky and gin arm.
However, while this assessment may appear somewhat downbeat, Moore is positive about the brand's future. "On day one after the acquisition, we met the Ballantine's team and they said it would be difficult to grow the brand as the marketplace was so static," he says. "But we disagree - there is real potential to rejuvenate and grow Ballantine's."
Central to Pernod's strategy is an overhaul of the marketing of the brand. As is the Pernod way, slick marketing focusing on the heritage of Ballantine's will be key. Moore admits that recent campaigns, such as the Go Play promotion for Finest, failed to resonate with consumers. He is, however, reticent to give too many details of Pernod's owns plans for the brand.
"We need to reassert the brand's quality and go back a bit to talk about Ballantine's origins," Moore insists. "The Go Play campaign was a long way removed from the brand. It was a campaign that struggled to really connect with consumers. It was about night-time excitement, rather than whisky values. It didn't work particularly well - people didn't link it clearly enough to the brand."
Under Allied, Finest had come to be seen by consumers as an almost entry-level Scotch. Moore says that the Go Play campaign had been aimed at a younger audience, and while Pernod wanted to keep some of the "energy" of that campaign, the company was looking to reinforce more traditional whisky cues.
"When it comes to whisky, people do want reassurance that at the end of the day what we're talking about is whisky," Moore tells just-drinks. "However, there has got to be some dynamism in the way that message is put across."
With regard to the Ballantine's 12 year-old offering, it is a more coherent message globally that is required. The whisky is sold in three different bottles around the world, a marketing strategy that Moore concedes is "a mess".
"Ballantine's should have a credible, cohesive 12-year-old and it just doesn't make sense to have different packaging for different markets," he says. "The 12 is not as developed as it could be."
Ballantine's 17-year-old, despite its popularity in markets like South Korea, has "suffered from not having a real clear piece of communication to take the brand forward", Moore says. He adds: "Ballantine's is ripe for rejuvenation. We are going to go back to the brand's truths."
For Pernod, Ballantine's brand "truths" are those words often used by spirits producers - authenticity, flair, integrity, elegance. But how does this differentiate the brand from Chivas? Moore says the brands are "very different".
"We think the brands are very different, in terms of where they come from and the personality of the brands - and the consumer thinks so as well," he says. "Chivas is more of an extrovert, while Ballantine's is a bit more reserved, there's less of that showy element about it. The brands appeal to different types of people and people drink them on different occasions."
Moore admits that Ballantine's and Chivas are strong in different segments of the market but insists that Pernod would not look to keep the brands apart in certain countries. "Chivas clearly dominates in premium, while Ballantine's is stronger in standard but is also strong at the top end, in super-premiums."
He adds: "We wouldn't necessarily keep the brands geographically discrete but to some extent the brands do have their different areas of focus. Chivas is very important for us in the US and now in Asia, while Ballantine's is strong in Europe."
Pernod, Moore says, now feels it covers more bases in the wider Scotch whisky category. "Ballantine's is an attractive brand for us. The (Allied) acquisition gave us a major international brand and we can now compete in segments where we were once under-represented with Chivas."
But is a blended Scotch category that's in the doldrums really that attractive to Pernod? Moore likes to think so. "Standard is a very big segment and although we're a significant player in it, we don't dominate it. Even though the total market is flat to declining, we don't necessarily feel constrained by that. Ballantine's offers good synergies with our portfolio and gives us an opportunity to grow our standard business."
In a sense, Ballantine's is a sleeping giant. The world's third best-selling Scotch whisky has also become Pernod's number two spirit brand, behind only Ricard in terms of volumes. If Pernod does succeed in breathing life back into Ballantine's in a sector where consumers are switching from blends to single malts, it will be one of its most notable post-Allied achievements.
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