Interview, Part 2: Bryan Fry of Pernod Ricard USAApril 1, 2014
In the second part of our interview, Pernod Ricard USA president and CEO Bryan Fry talks strategy, revealing the company’s approach on striking the right balance between spirits and wine, optimizing the route to market and building the Pernod Ricard brand portfolio.
SND: While some of your key rivals—such as Beam and Brown-Forman—have deemphasized wine over the past few years, Pernod Ricard USA seems to be sharpening its focus on the category. Why take this approach?
Fry: As long as you’ve got clarity in your route to market, then there’s no reason why spirits and wine can’t coexist in your portfolio. We have a long investment in wine, as it’s been more than 25 years since Pernod Ricard acquired the Jacob’s Creek business in Australia. We have a very good wine range, including a strong position in the highly profitable Champagne business. Additionally, even as U.S. wine consumption continues to rise steadily, it’s quite under-indexed versus a lot of other wine-consuming countries. So there’s still significant upside in wine, and we’re bullish on it.
SND: How satisfied are you with Pernod Ricard USA’s current route to market?
Fry: In the U.S., you can never be satisfied in your route to market. You need to constantly evolve it to suit the needs in terms of making sure you hit the consumer, while also working with the evolution in the retail chain. The three-tier system definitely has value in it, and we have excellent relationships with our wholesalers. While they’ve consolidated, we have as well. So, we’re as important to them as they are to us.
SND: Are there any particular voids in your portfolio that you feel the need to fill?
Fry: It’s a little like route to market, in that you can never be 100% satisfied with where you are. You’ve always got to be looking to how you can refresh and refine your portfolio to deliver on consumer needs. A few years back, we lacked a significant presence in Tequila. Because premiumization is so essential to our approach, we knew we wanted to operate in Tequila’s ultra-premium tier. So we partnered with Avión, and it’s been very successful. We’ve also identified growth opportunities in the $20-$25 tier for a 100%-blue agave product that delivers superior quality for that price point. So we worked with our partners in Mexico over the past few months to roll out our Altos brand nationally (Altos was test-marketed in a few states in 2010, but has had a very limited presence since then). Again, we’ve been very happy with that. So two years ago we really weren’t in Tequila. Now we believe we’ve got a strong Tequila play anchored by two brands in the category’s fastest-growing price points. That’s what I mean about refresh and refine and do what you need to do to get the right mix.