Comment - Pernod Ricard Aims to Harness Power of Innovation
Pernod held its innovation day yesterday
Alex Ricard, Pernod Ricard's CEO-in-waiting, told a neat little story during the group's innovation day in Paris yesterday (28 January).
In 1999, when he was in California's Silicon Valley on an MBA fact-finding mission, he visited the offices of a newly-minted tech start-up. The young owners were looking for investment and spoke of filling warehouses with servers packed with data. Ricard baulked at the idea - “I told them, as far as I was concerned, the only profitable thing that can be put in warehouses is whisky,” he said.
The start-up was Google, one-year on from its inception, and it's fair to say Ricard now retells the story with more than a hint of a rueful smile.
But, that failure to see the potential of what is now one of the world's biggest companies may explain why the group Ricard will eventually lead is ramping up its innovation.
Pernod has long prided itself on its innovative streak, regularly coming top of the drinks firms in Forbes' annual most-innovative list. Yesterday, journalists and analysts were told that it has 350 new products and technologies in the pipeline compared to 100 launched in the past three years.
Digital will play a big part in the innovation, and the company will invest 20% of its global marketing budget in the technology. During the innovation day, Pernod unveiled 'Project Gutenberg', an internet-connected home spirits dispenser, as well as the latest prototype in its Ballantine's-backed wearable tech, a T-shirt that displays personalised messages.
New products and brand extensions were also on show yesterday, including Brasil, a lime-infused variant of its Ballantine's brand and Martell Distinction, a Cognac aimed at on-trade sales in China's restaurants.
The new head of digital marketing, Antonia McCahon, is another example of Pernod's increased focus on innovation. She was brought in four-and-a-half months ago to take Pernod's use of technology away from merely scatter-gun brand communication to a unified strategy.
“It is a conscious change,” she said. “And, I think its a natural evolution as well.
“We'd done a lot of experimentation, some of it more successful than others. But, we have a real opportunity with this and we really need to get the whole organisation behind digital so everyone is singing from the same song sheet.”
The next step, of course, is to harness the technology so that it actually helps to shift product. Project Gutenberg is an interesting idea, but Pernod was at pains to point out it is still a prototype with no plans yet for release.
The T-shirt is also a prototype and, while it has helped increase brand awareness for Ballantine's, the latest model uses technology that the French firm doesn't own. That belongs to the Californian company that Pernod is partnering with on the project; there's nothing stopping the US firm from collaborating with other firms on similar items.
Also, the T-shirts won't be Ballantine's branded. Any T-shirt that allows personalised messages is likely to appeal to some of our baser instincts and the Scotch doesn't want to be associated with a slew of swear words, I was told.
Asked how the T-shirt will help bring sales back to Ballantine's, no one seemed able to give me a clear answer.
There was one product yesterday, however, that was innovative largely because it is anti-branding.
Our/Vodka is a program implemented by Pernod that gives entrepreneurial spirits makers the chance to make a vodka that is locally-sourced and made. It has been launched in Berlin, where it has already created a buzz in the city. Pernod now wants to roll the model out to other cities, starting with Detroit.
One interesting aspect is that the vodka will not be sold through Pernod's extensive distribution network but handled by the distillers themselves. Martin Riley, Pernod's CMO, told me this allows the model to retain the feel of a craft spirits start-up.
In fact, it works so well that one analyst I spoke to on the sidelines of yesterday's event said a lot of Our/Vodka's supporters in Berlin are not aware of its Pernod connections. It's easy to see why: The Our/Vodka bottle retains a handmade look and works hard to be part of a city's community.
Despite all yesterday's talk of high-tech digital marketing, then, it seems there is still success to be found the old-fashioned way.
Now that's innovation for you.
The international spirits segment is undergoing a sea-change in Asia, from Cognac declines in China to Scotch weakness in South Korea. Those effects may be less severe in the Travel Retail channel but...
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
Pernod Ricard SA (RI) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by Globa...
The strategy of Pernod Ricard is to become one of the leading companies in wine and spirits sales in Mexico. The company recently consolidated in Mexico with Casa Pedro Domecq México SA de CV, to beco...
Pernod Ricard is ranked second globally in terms of spirits sales by volume. However, it will face a stronger competitor in first-ranked Diageo once its acquisition of India-based United Spirits is co...
- just On Call - Pernod shifts Scotch focus in China
- Focus - Pernod's YTD Performance by Region
- Why Didn't Diageo Act Sooner on Mallya?
- Heineken seeks "clarity" in Indonesia
- Diet Coke "a work in progress" in US - Coca-Cola
- Pernod Ricard unveils new Absolut bottle
- Beam Suntory to strip down regional units
- Diageo's United Spirits calls on Mallya to quit
- CFO of Diageo's United Spirits stands down
- PepsiCo US to replace aspartame in Diet Pepsi
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- ALDI 2015: Radically transforming Anglo Saxon grocery markets