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Pernod Becomes Player In Ultra Premium Tequila, Forming Partnership With Avion

July 20, 2011

Pernod Ricard has secured a foothold in the ultra-premium Tequila category, acquiring worldwide distribution rights to Tequila Avión as well as a minority ownership stake in the emerging brand. “As great believers in the premium segment of the industry, this move fits completely with our strategy,” said Pernod Ricard USA chairman and CEO Paul Duffy. “Ultra-premium Tequilas are growing at double-digit rates. Nielsen numbers for the last 52 weeks show spirits up 3.8% and ultra-premiums up 15%. Within that segment, ultra-premium Tequilas are up 10%. So this is clearly the right opportunity for us. We’re combining a tremendously strong sales and distribution capability with a very innovative and dynamic young brand.”

Roughly a year after its introduction, Avión “has created unprecedented and impressive levels of awareness and velocity in the U.S.,” Duffy added. “It has established itself as a true lifestyle brand.” Avión has indeed made a name for itself during its short time on the market, due largely to its involvement on the popular HBO television show “Entourage.” The Tequila brand played a prominent role on the program during its seventh season, which aired in 2010. “With the ‘Entourage effect’, we’ve found that Avión has the brand awareness of a product that’s been around for 10 years, not one year,” said Ken Austin, chairman of Avión, which Austin and fellow Marquis Jet executive Kenny Dichter created in 2009. Buttressed by its exposure on Entourage, Avión took an aggressive route into a competitive category. “We’re a small player that came in like we were big,” said Austin. “In terms of marketing, advertising and what we asked of our distributors, we played the role of a brand much larger than we actually were, because we saw the potential.”

With such enviable name recognition and sales that have far outpaced expectations, Austin said there was no shortage of suitors but added that Pernod was undoubtedly the ideal partner. “It was really a simple decision, because of Pernod’s global reach and premium portfolio, and its exemplary management team and professional organization,” Austin said, adding that Avión’s leadership (including himself and company president Jenna Fagnan, among others) “plans to maintain our entrepreneurial approach, with Pernod alongside us every step of the way.”

Pernod already has a Tequila brand, Olmeca, but it’s at a price point in the mid-$20s, targeting a different demographic than Avión, which is priced at the high end of the Tequila spectrum. Avión’s Silver edition retails for $40-$50 a 750-ml., while its Reposado is at $45-$55 and its Añejo is at $50-$60. Given the difference in Avión’s and Olmeca’s price points, said Duffy, “we intend to develop the two separately. There certainly is room for both in the increasingly important Tequila category.”

Avión is currently available in 23 U.S. states (and Ontario, Canada), but Duffy envisions wider distribution for the fast-rising brand. “We intend to expand distribution at an appropriate pace across the U.S.,” he said.

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