Pernod Ricrad inherited Beefeater when it acquired Allied Domecq in 2005

Pernod Ricrad inherited Beefeater when it acquired Allied Domecq in 2005

View 1 related image

In this, the first 'just the answer' of 2010, just drinks speaks to the international brand director for Beefeater and Plymouth Gin at Pernod Ricard's Chivas Brothers unit. Simon Burley has held the position for only a matter of weeks, having been appointed in October last year, but already he has high hopes for the brands, despite a tough year for the category in 2009.

just-drinks: Gin is widely-believed to be weighed heavily in the direction of mature spirit markets. Do you feel that this is a fair charge?

Simon Burley: There are certainly two main markets for international gin – the US and Spain – which account for around 60% of total global volume for gin. But the category is growing in some emerging markets, like Greece and Russia. We're quite bullish about the prospects for premium gin in these emerging European markets.

One of my key challenges is to capitalise on that growth in those markets, so we'll be doing work outside of the US and Spain to try to achieve that.

I think it's a fair assessment to look to Europe outside of the US. We're the clear premium gin leader in Spain, and the US is obviously a very big market. But there is definite opportunity in Europe and some smaller opportunities in Asia.

j-d: You've not mentioned the more widely-known BRIC markets as offering opportunities for gin. Why not?

SB: As a business, we're very focused on Latin America, but that's more with our Scotch whisky brands. I think the really big opportunity for our gin portfolio is in Europe and in the super-premium sector, which is growing very strongly.

For me, the two biggest challenges are to ensure we continue to grow market share in Spain – as well as capitalising on market opportunities in Europe, in particular Greece and Russia - and to maintain the strong start we've had with Beefeater 24 in the super-premium sector.

j-d: Before we consider Beefeater 24 specifically, can we look at the effect of the global economic environment of the past year on gin?

SB: I think it's been a tough year with the economic crisis. In the last fiscal year, we saw a decline in volumes for Beefeater Dry from 2.4m cases to 2.3m.

But we're confident we'll bounce back - we've got strong platforms behind Beefeater Dry. You also need to remember that, between 2006 and 2008, Beefeater Dry grew by 2.1% - that's above the gin category. So, we had been growing up until the end of 2008. The last fiscal year, up to the end of June 2009 has been more challenging, with many of our key markets being affected by recession.

But we're growing market share in Spain and we see some exciting opportunities in Europe, so we're relatively positive about the premium category. We're also quite excited about the super-premium sector.

j-d: By super-premium, you're referring to Beefeater 24. How has the brand performed since its launch in late-2008?

SB: It's been very successful. We now distribute the brand in over 25 markets worldwide, while our initial expectations were to be in only nine or ten, so there's great momentum behind the brand. We're also seeing very strong bartender endorsement in the US, with brand presence in over 1,000 bars in the country.

Looking forward, we've got plans in place to double our volumes this fiscal year, and to become the clear number three player in the super-premium gin sector by the end of 2010.

j-d: As well as Beefeater, you're also responsible for the Plymouth gin brand, which Pernod inherited when it acquired Vin & Sprit in 2008. How is the brand performing and why has the company decided to keep hold of it?

SB: It's doing fairly well. We sell around 130,000 cases on an annual basis. We're very keen to show that we have one of the most dynamic gin portfolios. Plymouth is positioned in the market as the malt whisky of gins and competes at the connoisseur level. We see it sitting very nicely at the top end of our gin portfolio.

We've got three very distinct gins with three very different positionings. We also have an opportunity in Plymouth to compete – along with Beefeater 24 – in the super-premium sector, a sector which grew by close to 15% between 2006 and 2008.

I think we have good coverage across gin category, while in the US we have Seagram's gin competing in the standard category.

j-d: Returning finally to Beefeater. In the gin category, the term 'London Dry Gin' refers to a production process and not to an origin. But Beefeater is produced in London. Does provenance play any role in the gin category?

SB: It's true that the term London Dry Gin does not mean that it is produced in London. Beefeater is the only major international gin that is still distilled in London. While some gins produced outside of London can still use the term London Dry Gin, we can say that we have a gin that is distilled in London, and we see great authenticity in that.

We also bring a lot of bartenders, media and trade to our home in London, so we still feel that our London location offers us some strong credentials in terms of provenance.