Pernod Ricard USA CCO Paul Basford On Revamping The Route To Market

In recent days, Pernod Ricard unveiled significant changes in its U.S. commercial organization and route to market, including the creation of specialized selling units for its RTD and emerging spirits brands respectively. At the distributor level, Pernod has tapped Reyes Beverage Group, Crescent Crown, and associated companies to handle its RTD range across eight states, while enlisting Crescent Crown and Johnson Brothers/Maverick, along with Southern Glazer’s, RNDC, Breakthru, Heidelberg, and Martignetti, as key partners for its GEM portfolio of up and coming brands. 

According to Impact Databank, Pernod ranked seventh in volume terms among all U.S. spirits marketers last year at 15.3 million cases. SND executive editor Daniel Marsteller spoke with Pernod Ricard USA chief commercial officer Paul Basford to hear how the company plans to leverage its new route to market to unlock growth. 

SND: What were your main objectives in updating Pernod Ricard’s commercial structure and route to market?

Basford: The major task is to continue to grow our mainline business with our great partners at Southern and RNDC and the like. Jameson, Absolut, Malibu, Glenlivet, and others represent the bulk of our business. The brands within that mainline portfolio continue to need focused attention.

At the same time, our RTD business has now grown into a nice place where we’re able to make this choice. Our Absolut, Malibu, and Jameson range of RTDs has been built to a scale where we can benefit from using a different route to market, going through a beer distributor network across eight states—including California, Arizona, Florida, Illinois—that bring about 50% of our business. So we are animating those eight states with Reyes, with Crescent Crown, and associated partners in that network.

We believe that system brings different capabilities, a different selling opportunity, and scale through the beer network. It can really get our brands the visibility, velocity, and volume through those stores that we operate in. We will then use that across the year to bring an exciting innovation platform, which we’ll talk about further down the line.

SND: What are your goals with the new emerging brands unit?

Basford: We have another 20, 25 brands that we are calling the GEM portfolio. They’re gems that need polish, that need support. And the oxygen around that comes from operating a transversal distribution system. So taking some of them out of our mainline portfolio, bringing some in from third-party distributors, and creating a GEM portfolio that will run as a separate business unit reporting under one commercial organization is the task.

We have brands like Rabbit Hole whiskey, like Malfy gin, Elyx vodka, Avion Tequila that just don’t get the opportunity to shine in a portfolio when you’ve got Jameson, Malibu, Kahlua, and Glenlivet. By moving them out we are going to find a sequence of future growth brands that will flourish under new accountability, animating that portfolio as a business in a different way, and equipping ourselves with just basic POS tools will be a step forward on some of these brands. We can also bring innovation and incubate properly in this GEM portfolio.

I think this approach also frees up more focus for our mainstream portfolio at the same time. Through partners like Breakthru Beverage, Johnson Brothers, and Empire Merchants, we have an opportunity to express ourselves in a different way with new distributors that are keen to grow the Pernod business. The distributor landscape and the entire market is evolving. We think this puts us in the best place for the future.

SND: Is the transition fully complete?

Basford: Our RTD business has transitioned, and we went live with the GEM portfolio on September 1, so I think we’re in a good spot. The aim was to get the GEM business in place so we can start to accelerate the holiday selling, and we’ve done that. We’re excited about the opportunity on GEM, as are our new distributor partners. It’s a new impetus for them to access the Pernod portfolio where maybe they previously haven’t.

We’ll have more with Paul Basford in the second part of this interview. 

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