Pernod’s U.S. Sales Dip 7% In First Half, A&P Investments To Boost Second Half
February 15, 2024Pernod Ricard saw organic sales drop by 3% to €6.6 billion ($7.1b) for its fiscal first half ended in December, with sales in the Americas and Europe dragging down the company’s slight gains in the rest of the world. Organic profit was down 3% to €2.1 billion ($2.3b). Pernod attributed the decline to the end of the Covid-era boom in sales, as well as inventory adjustments in the U.S. and economic challenges in China. Overall, the company is seeing a benefit from high single-digit price hikes across the global business, offset by lower volume.
Pernod’s U.S. sales, accounting for 19% of the global business, slipped by 7% in H1, with value depletions down 6% on tough comps. Still, the company sees consumer demand as resilient amid ongoing normalization in the spirits business. Pernod expects better U.S. performance in H2 due to recent marketing and brand activation efforts, with A&P at 20% of net sales in the U.S. in the first half, although destocking will continue to create a drag.
Specifically, Pernod expects to see more relative gains from its investments in Irish, North American, and Scotch whiskies looking ahead. The company says it’s gaining share in numerous categories in the U.S., with Jameson, Malibu, Kahlúa, The Glenlivet, Codigo, and Jefferson’s all capturing a larger share of their markets, despite the overall headwinds.
According to Impact Databank’s estimates for 2023, Pernod’s portfolio faced challenges across key brands for the calendar year, with Jameson down roughly 9% to under 4 million cases, Absolut dropping 10% to under 3 million cases, and Malibu off by 8% to roughly 2.5 million cases. While Pernod’s largest brands struggled in 2023, its RTDs and American whiskey brand Jefferson’s continued to grow. Malibu’s RTDs were up 23.7% to over 500,000 cases, Absolut’s RTDs grew 4.2% to reach 421,000 cases, and Jefferson’s grew 10.8% to just under 200,000 cases.
Pernod is now expecting full-year sales to be flat across its global business, with organic operating profit up low single-digits, adding that it’s “confident in our medium-term financial framework of +4% to +7% top line growth.” —Shane English
| Pernod Ricard—Key Spirits Brands in the U.S. (Thousands of 9-Liter Cases) |
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| Brand | Origin/Type | 2022 | 2023E | Percent Change1 |
|
|---|---|---|---|---|---|
| Jameson2 | Irish Whiskey | 4,241 | 3,854 | -9.1% | |
| Absolut2 | Imported Vodka | 3,127 | 2,801 | -10.4% | |
| Malibu2 | Imported Rum | 2,750 | 2,536 | -7.8% | |
| Kahlúa | Imported Liqueur | 929 | 925 | -0.4% | |
| Malibu RTDs | Pre-Mixed Cocktail | 419 | 518 | 23.7% | |
| Skrewball | Flavored Whiskey | 584 | 489 | -16.2% | |
| The Glenlivet | Single Malt Scotch | 507 | 444 | -12.4% | |
| Absolut RTDs | Pre-Mixed Cocktail | 405 | 421 | 4.2% | |
| Beefeater | Imported Gin | 415 | 384 | -7.6% | |
| Olmeca Altos | Tequila | 307 | 318 | 3.4% | |
| Chivas Regal | Blended Scotch | 239 | 204 | -14.5% | |
| Jefferson’s | American Whiskey | 177 | 196 | 10.8% | |
| Total Key Spirits3 | 14,098 | 13,090 | -7.2% | ||
| 1 Based on unrounded data. 2 Includes flavors; excludes RTDs. 3 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2024 |
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