Pernod Sees China’s Growth Slowing But Still Has Ambitious Goals For Market

Pernod Ricard believes that the explosive growth that has characterized China’s premium imported spirits category may be coming to an end, but the company still sees enormous upside in China—and is squarely focused on expanding its presence there.

Speaking at an analysts’ conference in Beijing earlier today, Con Constandis, Pernod’s managing director for China, said that 2013 has been a year of “converging challenges” in China. The country’s robust economic expansion has cooled a bit of late, while a new clampdown on inter-governmental gift-giving and banquets led to relatively soft sales for Pernod’s Martell Cognac in the first few months of the year. Still, said Constandis, “China is a land of tremendous opportunity.”

Forecasters say China’s economic growth should accelerate in the second half of 2013 and project it will finish the year at around 8% (compared to 7.7% growth in the first quarter). Additionally, the country’s professional class continues to evolve rapidly. China is on pace to add about 10 million newly affluent consumers each year through 2020, according to Horace Ngai, Pernod’s deputy managing director for China. “We will have a lot more opportunities in more places,” he said.

Meanwhile, Pernod is aiming to solidify its leadership of China’s premium spirits market. The company says a primary goal is to raise its share of that market from its current 35% to 40% by 2015. While Pernod’s Chivas Regal Scotch whisky was long China’s top-selling imported spirit brand, it’s been eclisped by stablemate Martell, which recently became the first import brand in China to sell more than 1 million cases in a 12-month period.

Tagged : China, Pernod Ricard, spirits

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