Comment - Pernod Ricard: Brands that are Hitting the Mark... and Brands that aren't
Mumm's the word in China this year
Pernod Ricard has a vast number of brands in its portfolio, many of which are performing well, according to today's full-year results. Here, just-drinks takes a look at the top five, plus a few that blotted the copybook.
- Top of the class was Pernod's workhorse Martell, which continued to perform heroics in key emerging markets. Overall, the brand found 25% organic sales growth after 22% last year and again saw record volumes. Its dedication to the cause was mostly felt in China, where it passed the 1m-case mark and helped the country to 24% organic sales growth. It was even hard at work getting Pernod up and running in Vietnam, where the company is still rolling-out its distribution network. It only makes up about 4% of Pernod's overall volumes, but has its sights set on greater things.
- Whiskies make up the majority of this list, thanks to Asia's seemingly insatiable thirst for them. Few companies are as well placed in the Asian whisky sector as Pernod, but executives must still be pleased with the success of Jameson over the past year. It was the main growth driver in Americas with 29% sales growth, and in Russia. It even has an ad campaign in Russia, South Africa and the US featuring Oscar winner Kevin Spacey. Talk about star power.
- Compared to the whiskies, Champagne brand Mumm's 6% organic sales growth won't trouble the headlines. But considering that it found 1% growth in France, Spain and Italy as all else fell apart there, its performance is cause for celebration. Meanwhile, it found 51% growth in China, which is now the product's second-biggest market behind the US.
- Passport is not one of Pernod's much-vaunted top-14 brands, which take the lion's share of the company's marketing efforts. However, the whisky brand this year quietly passed the 1m cases mark and found double-digit growth in Mexico and Brazil. It was recently launched in Russia and is seen by Pernod as its ticket to the growing middle class in emerging markets. Keep an eye on this one.
- Royal Salute is a lesser leading brand, but that hasn't stopped the whisky posting 23% organic sales growth in the past financial year.
And the losers
- 100 Pipers is a regional brand with a whisky stranglehold on Thailand that is slowly loosening. It's still the top whisky there in terms of volume, but overall sales fell by 5% organically, Pernod said, citing “persisting difficulties”. Of course, the real reason is price. “It has suffered quite simply because we have been discriminated against price-wise,” Pernod CEO Pierre Pringuet said. “As you know there are negotiations between Thailand and the European Union. At the moment, Thailand charges heavy excise duty against imported brands, and 100 Pipers is an imported competitor of local brands." Thailand last week announced it was hiking taxes on spirits, so don't except those negotiations to end soon.
- Havana Club posted 13% growth in France, but Pernod said the rum performed poorly in its “core markets”. Sales declined in Italy and Spain and saw overall organic sales growth flatline.
- With losers like this, who needs winners? Absolut vodka proudly sits at the top of the Pernod tree, making up about 20% of the group's total volumes. But it's been a slow year for the vodka, with 3% sales growth compared to 6% the year before. “Numerous initiatives already launched or planned,” Pernod said in defence of its golden child.
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