The just-drinks Interview - Irish Distillers' CEO
At only 37 years old, Alexandre Ricard's swift ascent on the Pernod Ricard power ladder has turned heads in the industry. His latest role, as CEO of Irish Distillers, has coincided with strong growth for the group's Jameson Irish whiskey brand. Just-drinks deputy editor Chris Mercer catches up with the hotly-tipped Pernod protege during a fly-by visit to London.
Ireland may be in the midst of one of the worst recessions the country has known, but it appears that somebody has forgotten to inform Irish Distillers, the Irish whiskey business of Pernod Ricard. "It's been an exceptional environment, but Jameson is growing year-on-year," says Ricard, with the satisfied expression of a cat that has found a secret supply of cream.
Worldwide sales of Jameson whiskey rose 8% in value and 2% in volume on a like-for-like basis in Pernod's most recent fiscal year, the 12 months to the end of June. Jameson's value sales growth slowed to 2% in the first quarter of the new year, while volume sales dropped 3% for the three months. However, the result must be seen against a 4% fall in Pernod group net sales for the quarter, which included value sales declines for most of the firm's 15 strategic brands.
Export sales are driving growth, according to Ricard. "In Eastern Europe, Bulgaria is up 46% [in volume], Russia is up 14%. In South Africa, we are up 4%," he says: "We want to become global as a brand and we are getting there."
It is the US that has most enhanced Jameson's presence on the world drinks scene. Of the 2.7m cases of Jameson's sold worldwide every year, around 800,000 are now sold in the US and Irish Distillers has just launched its first television advertising campaign in the country.
"In the US, we are growing double digit in 48 out of 50 states and the latest numbers still show above 20% growth rates," says Ricard. "Jameson is the second-fastest spirits brand [in the US] in terms of net sales growth."
He believes there has been a "fundamental" change in consumer values as a result of the financial markets collapse and subsequent economic malaise. Consumers have moved away from "bling bling" culture and are seeking "true value" in what they buy.
Alexandre Ricard, CEO of Irish Distillers
"This doesn't mean that consumers are looking for cheaper brands, but they are looking for brands that are worth what they are claiming to be worth," he says.
Jameson's new television adverts, one produced for the US and a separate one for "rest of world" markets, reflect this switch in values, such as conviviality and authenticity, says Ricard. "There's a constant thread going through all the advertising we produce. It sums up what people are looking for today."
It's clear that Jameson is performing well on exports, but the traditional Irish pub setting depicted in one of the new adverts - displayed below - turns attention to Irish Distillers' domestic situation. Appropriately, the advert also depicts a storm in full force outside the pub, somewhat mirroring Ireland's current economic predicament.
Pubs are closing down and thousands of jobs linked to the drinks trade in Ireland are under threat, according trade body Drinks Industry Group of Ireland.
Here, Ricard pulls no punches."The economy is heading for an 8% drop in 2009, and there is a predicted 3% drop next year. That will mean that close to 15% of Ireland's economy has evaporated in the last two-and-a-half years," he says.
The industry is pressuring the Government to cut duty, Ricard notes. "Ireland already has the most penalised drinks industry in the EU. The industry is going to ask for significant cuts in excise duty and by that I mean double digits. They should give it some serious thought."
Government revenue from tax on spirits has fallen 22% so far in 2009, compared to the same point in 2008, and the sector is losing trade across the border to Northern Ireland, where duty is lower, he says.
In the end, our discussion of Ireland's economy comes back to exports. "The recovery will come from export-led businesses," he says, in a clear signal that ministers should do more to lift the burden for the likes of Irish Distillers.
Finally, I can wait no longer and dive into the pool of speculation surrounding Ricard's future. His success is, after all, accompanied by his status as the nephew of Pernod's chairman Patrick Ricard, the grand old man of the French wine and spirits group.
Surely Ricard junior must have thought about stepping into 'the shoes'? His answer is rooted firmly in the present, telling me that he is "very committed to Irish Distillers" and he is on a "long-term contract", which just-drinks understands is around four years in length.
Just the sort of diplomatic, intelligent and personable response one might expect from someone destined for higher office.
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At only 37 years old, Alexandre Ricard's swift ascent on the Pernod Ricard power ladder has turned heads in the industry. His latest role, as CEO of Irish Distillers, has coincided with strong growth ...
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