Pernod Ricard Winemakers is turning to Asia, premiumisation and Spanish wines as it seeks new profit opportunities.
Strong demand in China and India led to 6% organic sales growth for Pernod Ricard in its 2017/18 full-year results, released last week. The Asia-Rest of World region lead the charge with an acceleration of 9%.
The results drew attention to the rise of premiumisation within the company’s wine portfolio, led by its Spanish brand, Campo Viejo.
Chief Executive Officer Alexandre Ricard told investors last week: “We have a clear value strategy for our wines with positive pricing.
“Innovation and luxury are two of our business accelerators. We see continued strong momentum behind the big bets.”
The runaway success of Campo Viejo
Now the No.1 selling Rioja in the world, Campo Viejo is a contemporary expression of the classic Spanish wine.
Chief Executive Officer Alexandre Ricard noted during an earnings call that while the New Zealand range Brancott is “in decline due to a very competitive environment and especially in Pacific; and Jacob’s Creek is experiencing “deceleration” that has been “driven by the implementation of the value strategy in the UK”; the Campo Viejo range is booming.
“Our wine portfolio is continuing to premiumise with a clear focus on Campo Viejo and with good pricing across both wines and spirits, so a clearly value-driven strategy for the UK market.”
He also pointed to the “great performance” of the range in the US.
The story in Australia
Ricard told investors that Australia is in “slight growth” with its strategic brands, as well as “accelerating and decline in our wines because we are focusing on value more than volume”.
Champagne was a highlight for Pernod Ricard, with Mumm up 1% due to “a stronger performance in Australia, one of our key markets, but as well Americas, one of our investment markets, as well as Asia”.
Meanwhile, Perrier-Jouët was up 6%, with strong performance in Japan, China, which are both in double-digit growth.
Ricard said innovation was driving profit in the wine category, pointing to the success of Double Barrel Jacob’s Creek, which he noted was “growing very nicely”.
High hopes for India
Bruno Rain, chairman and CEO of Pernod Ricard Winemakers, recently told Live Mint that wine is becoming big business for the company in India.
Pernod Ricard launched Campo Viejo in India last summer and, buoyed by the reception, the company is set to launch wines from Brancott Estate in Marlborough, New Zealand, in a couple of months.
“Imported wine in India is still a small market but it is growing steadily, so we see ourselves expanding our portfolio in India and bringing in wine from different countries of origin,” Rain said. “In the last six years, the category has doubled in terms of volume. At that rate, it would be safe to assume that the imported wines will be at the one million cases mark in the next decade.”
“India is a priority market for us with a clear potential.”
When asked if Indian food pair well with wines, Rain noted: “There are so many different kinds of wine that I am sure some must pair well with the Indian food. Jacob’s Creek Sparkling, for example, won an award for being the best wine paired with butter chicken in 2017.”
A new Global Marketing Director to spearhead growth
Pernod Ricard Winemakers recently appointed Darryn Hakof as its Global Marketing Director.
Aussie Hakof has nearly 20 years’ experience within the Pernod Ricard Group, most recently in his role as Director of Strategy and New Business for Pernod Ricard Winemakers. He started his Pernod Ricard journey in 1999 as a Management Accountant for Orlando Wyndham Group and has since worked in various global roles in business and brand development across the Pernod Ricard group, including Vice President of Brand Development for The Absolut Company.
The company noted: “Darryn brings extensive knowledge of the Pernod Ricard portfolio and has developed a deep understanding of global wine markets and consumers.”
Hakof said: “Our portfolio of leading, award-winning, wine brands is one of the most premium and diverse in the industry. This is an exciting opportunity to work with our talented, innovative and passionate teams, and with our valued global partners, to bring our brand stories to life with consumers around the world”.