Pernod Ricard keen to stem Absolut US declines
The US accounts for around 40% of Absolut's global sales
Last week, the company said it had taken an impairment charge of EUR404m (US$455.2m) on Absolut in its latest fiscal-year thanks in part to "lower growth in the US". The brand saw US sales in the 12 months to the end of June fall by 5%.
The performance follows a tough fiscal-2014 for Absolut in the country, when sales fell by 5% also.
Speaking to media in London earlier today, MD of finance Gilles Bogaert noted Absolut's recent loss of market share in the US. “Growth in the US has been lower than we expected when we bought the brand (in 2008),” he said. “We lost market share at the moment that the vodka market was quite competitive and was changing rapidly with the arrival of new brands. That said, we are confident that we can do a good job on the brand in the US.”
Bogaert flagged a planned update of Absolut's packaging and the recent roll-out of super-premium iteration Absolut Elyx in the country. He also warned that the group needs to improve the way it connects with younger consumers.
“I think we need to do a better job to recruit Millenial consumers and to tell them about the brand's authenticity, roots and history,” he said earlier today. “This is something we need to do better in our marketing communication.
“Category growth (in the US) has been driven by new entrants, which have taken share,” he added. “We clearly need to adapt our communication of the brand.”
Pernod is targetting mid single-digit sales growth in the US overall in the medium term. Absolut accounts for around 25% of group sales in the country, as does Jameson Irish whiskey.
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