Editor's Viewpoint - Spirits: (Don't) Mind the Gap
Whenever you give a business journalist the opportunity to ask a senior drinks executive – particularly one who works in spirits – a question, you can be pretty certain this will be that question:
“How concerned are you about the gaps in your company's portfolio?”
It's up there with M&A activity – or the subject's lack thereof – as being an area that the press corps can be relied on to probe.
Yesterday, at Pernod Ricard's annual presentation to media and analysts, was no exception. After a full morning's presentations centring around the Jameson Irish whiskey brand, the company's senior-exec team, led by CEO-designate Alex Ricard, was asked about Pernod's absence of a play in Bourbon.
“I don't think it's quite as clear-cut as that any more,” replied Ricard. “In the US, for example, the main competition for Jameson comes in the form of (Brown-Forman's) Jack Daniel's.
“Although the industry thinks in terms of portfolio gaps, consumers don't think in terms of portfolio gaps.”
Several industry observers have shared their thoughts on this approach with me. “Nobody has any gaps in their portfolio from a consumer perspective,” says one. “Consumers buy based on brand, not range.”
A counter-argument runs thus: “They don't have a peated Scotch whisky; the fastest-growing sub-category in Scotch. The consumers want it, Pernod don't have it.”
Ricard's response - and these subsequent remarks – have got me thinking: When it comes to consumer preferences, has the spirits industry got its category definitions wrong?
Granted, for issues such as geographical indication, for example, there needs to be a Bourbon category, a Tequila category, a Scotch whisky category.
But, are we being too myopic in our spirits categorisations, when it comes to consumers?
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