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Pernod Ricard Says On-Premise Is Driving Gains, Sees Major Innovation Push For 2013

December 21, 2012

Pernod Ricard is optimistic about its sales outlook as the holiday season heats up, especially in the on-premise, where U.S. spirits dollar growth is currently running above 7%. Pernod Ricard Americas chairman and CEO Philippe Dreano told analysts in recent days that the strong performance of the on-premise of late is “especially good news for Pernod Ricard USA, because our portfolio is skewed more toward the on-premise than the industry average.”

Jameson (the industry’s top contributor to dollar value growth over the past 52 weeks, according to Nielsen, excluding product innovations), The Glenlivet, Avión and others have been driving on-premise growth for Pernod. The off-premise market for spirits, Dreano added, is also seeing healthy 4% growth.

Dreano also said Pernod has been successful at outpacing industry value growth over the past year. “For the last few years we’ve been running at about a 3%-4% positive price mix, above both inflation and the total spirits industry,” he said. Aiming to continue that trend, this fiscal year (ending next June), Pernod has taken the first broad-based price increases across its portfolio since the financial crisis, including a hike on Absolut across six key open states beginning in October. Dreano said it’s too early to detail the results of that move, but that Pernod is “optimistic about the outcome.”

In the new year, Pernod will be following up recent innovations like Absolut Tune, Absolut Hibiskus, Malibu Red and Deadbolt California wine with ample new product activity. Pernod Ricard USA confirmed to Shanken News Daily that 50 “innovations or new products” are scheduled for the current fiscal year.

Rival Bacardi USA is also bullish on the holiday outlook, although CEO Robert Furniss-Roe said in recent days that despite the market’s progress, consumer confidence remains “the biggest headwind” facing Bacardi and the industry as a whole. Still, Furniss-Roe, speaking in a Bloomberg interview, said he sees strong potential for trading up this holiday season, noting that consumers typically spend 25% more on spirits purchases during the holidays than at other times of the year. Regarding Bacardi’s portfolio, Furniss-Roe said Dewar’s—and Scotch in general—continues to make gains among female drinkers, with women now accounting for 35% of the brand’s audience. Longer term, Furniss-Roe still sees opportunity in upscale rum. “We already have premium rums like Bacardi 8, and we’re going to have many more over the next few years,” he said. “The cycle (toward brown spirits) is turning in our favor in this particular category.”


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