AMERICAS: Pernod Ricard positive over premium spirits growth in Brazil

By | 14 December 2012

Pernod is eyeing the on-going opportunity in Brazil

Pernod is eyeing the on-going opportunity in Brazil

Pernod Ricard has said that overall spirits growth in Brazil will be driven by the premium sector, particularly vodka and Scotch whisky, which will favour the company.

In an investors' conference call yesterday (13 December), the group's Americas chairman & CEO, Philippe Dreano, said that the country's spirits category is projected to grow at 3.8% per year by volume “over the coming years”. He also noted that 60% of the population is under 34-years-old.

“All indicators are pointing in the right direction, with a declining inflation and unemployment rate,”  Dreano told analysts. “The demographics also work well for us.” 

He said that its Absolut and Chivas Regal brands are well postioned to take advantage of this, adding: “Premiumisation is alive and well in Brazil.”

Innovation had been a “key driver” for brands in the region, Dreano said, pointing to 'Absolut Unique – End of Year Edition' and new flavours of its Orloff Bold brand.

In the US, Dreano noted that the on-trade is experiencing a faster rebound than the off-trade, with sales up 7.3% in value, since Summer 2009. “This is even better news for Pernod, as our porfolio is more skewed to the on-trade than the industry average,” he said.

Dreano said the company has seen a good response to price increases in the country, with Jameson in particular reporting a 28.6% rise in value terms in the second calendar half of this year. 

In Mexico, Pernod has re-shaped its brand portfolio and sales force after a structural review. The new strategy is giving positive results, Dreano said, with Absolut and Chivas Regal both seeing growth. 

Concluding, Dreano said the company is “more focussed than ever on driving value growth” for its its brands.

In October, the group reported that group Q1 net sales rose by 5% to EUR2.2bn (US$2.86bn) in the three months to the end of September.

Expert analysis

The Future of the Spirits Market in Brazil, to 2016

Future of the Spirits Market in Brazil, to 2016 is the result of Canadean’s extensive market research covering the Spirits market in Brazil.

Sectors: Emerging markets – BRIC, Spirits, Wine

Companies: Pernod, Ricard, Absolut, Chivas Regal, Jameson

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