Analysis

GLOBAL: Diageo leads Pernod Ricard in top-end vodka fight - analyst

Most popular

The just-drinks Analyst returns

Why spirits must rethink its future positioning

Why spirits should look back to move forwards

The just-drinks Analyst returns

Gaming - the next frontier for drinks marketing

MORE

Pernod Ricard's super-premium vodkas lack the depth to compete with Diageo's as vodka continues its value boom, an analyst has said.

//i2.aroq.com/1/pernodricard-diageo.jpg

The French company boasts a stronger premium vodka stable, but lacks a contender to its rival's high-value Ketel One and Cîroc brands, Sanford Bernstein said in a note yesterday (15 January). The super-premium segment will benefit most from strong premiumisation trends in vodka that have seen value grow ahead of volume for the past ten years, the note said.

Diageo and Pernod are the world's leading vodka makers by value, with 15% and 8% of the global market respectively.

Bernstein also warned that Diageo's lower-value Smirnoff will face intense competition in the mainstream segment as new products flood the low-barrier market. However, Smirnoff is poised for further growth in Latin America, the analyst added.

“From a category growth standpoint, we believe the outlook for vodka remains positive,” it said. “In particular, we see a mid-long term opportunity in emerging markets as women become more important as purchasers and consumers of alcohol.”

Vodka remains the largest category within spirits, the note said, both in volume and value terms, and accounted for 19% of global spirits volume and 17% of global spirits value in 2011. Central and Eastern Europe accounts for 73% of consumption, and despite relatively flat growth, premium offerings Russian Standard and Brown-Forman's Finlandia should emerge as long-term winners, Bernstein said. Producers of cheaper brands in C&E Europe will continue to lose out as the vodka market moves forward, it said.

In November, an analyst warned that lower-value vodka players in Russia, such as Central European Distribution Corporation, will face pressure from premium brands and the illegal, non-taxed market.


Related Content

Baijiu, vodka and the white spirits challenge for Diageo - Analysis

Baijiu, vodka and the white spirits challenge for Diageo - Analysis ...

Heineken faces tough battle in China's growing super-premium tier - analysis

Heineken faces tough battle in China's growing super-premium tier - analysis...

Scotch hots up while vodka blows cold for Diageo - Analysis

Scotch hots up while vodka blows cold for Diageo - Analysis...

"Our strategy in Africa is to grow our beers fast and our spirits faster" - Diageo Africa president ...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?