Pernod Ricard has doubled down on its investment in Sovereign Brands, “significantly” increasing its minority stake in the US wine-and-spirits brand owner.
The French wine-and-spirits major said the deal – struck a little over a year after it first took a minority stake in Sovereign – would strengthen its “US market exposure” and increase its profit from recurring operations by around 3% on a full-year basis. Financial terms were not disclosed.
Once the deal is completed, Pernod Ricard said it would “fully consolidate” Sovereign Brands in its financial statements, adding it has the option to further increase its stake in the partnership in the future.
Just Drinks understands, however, that the investment in Sovereign remains a minority one at present.
Citing the progress made in the past twelve months, the Martell brand owner pointed to an acceleration in the sales of brands within the Sovereign portfolio, including French sparkling wine Luc Belaire (1m nine-litre cases sold in 2021) and range of Caribbean rums sold under the Bumbu brand (300,000 nine-litre cases sold in 2021).
The two companies are also planning to launch an unnamed brand from a joint incubation project in the coming months.
In its statement, Pernod Ricard said the investment fitted with plans to build a “consumer-centric portfolio” and invest in categories it expects to grow.
“Our partnership with Sovereign Brands has already proven to be very successful, with brands such as Bumbu and Luc Belaire now reaching an ever-growing number of consumers in the US and abroad,” Pernod Ricard CEO Alexandre Ricard said. “I believe we are perfectly matched as two consumer-centric companies with a shared commitment of creativity, innovation and brand building.”
Brett Berish, CEO of Sovereign Brands, added: “In the year since we first announced our partnership with Pernod Ricard, everything that we could have hoped for from the relationship has come to pass. With the upcoming launch of our innovative first joint brands together, it’s the perfect time to deepen our partnership.”
Founded in 1999 by brothers Brett and Brian Berish, Sovereign Brands owns a selection of wine and spirits brands that also includes Villon Cognac.
Its biggest success, however, has been Luc Belaire – a wine brand built on the importance of celebrity marketing. The brand’s range of sparkling wines is commonly seen across the social media accounts of US musicians Rick Ross, Drake and DJ Khaled. It is one of the top-selling French sparkling wines in the US.