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Exclusive: Impact Databank’s Analysis Of Pernod Ricard’s U.S. Progress

February 16, 2012

While Pernod Ricard’s 8% net sales growth to €4.61 billion ($6b) in the six months through December was driven largely by an 18% surge in its emerging market business (identical to rival Diageo’s), Pernod’s U.S. net sales also enjoyed a healthy uptick, rising 5% over the period. An exclusive analysis from Impact Databank reveals that Pernod’s high-flying Jameson Irish whiskey brand, along with a revitalized Malibu rum, offset U.S. volume declines for Absolut vodka, Seagram’s gin and Chivas Regal Scotch in calendar 2011.

Jameson’s spectacular rise in the U.S. market continues to be one of the drinks industry’s top stories. The fact that the super-premium ($25) Irish whiskey actually picked up speed during the recession—more than tripling in volume since 2006 and prospering in the on-premise all through the downturn—testifies to its brand cachet among trend-setting spirits consumers.

Malibu’s renewed strength in the U.S. market is a more recent trend. Not long ago, both Malibu and Kahlúa were seen as turnaround projects for Pernod Ricard USA. Kahlúa continues to struggle, slipping below 1 million cases in 2011 for the first time in decades. But Malibu, boosted by playful new ad positioning, returned to volume growth in 2010 and then advanced by nearly 7% last year, breaking the 1.7-million-case threshold for the first time.

Pernod aims to keep Jameson and Malibu consumers engaged by innovating on each with new extensions. Jameson’s Black Barrel ($35) was introduced last fall, while Malibu Red, a rum-Tequila hybrid selling at a premium to the core brand’s $14 a bottle, is slated for an upcoming release. (Malibu Red follows two other variants including higher-alcohol Malibu Black, and a seasonal Malibu Winter offering accented by coconut flakes swirling in the liquid).

The Glenlivet—the leading single malt Scotch brand in the U.S.—continued its steady upward progress last year, rising 6.5%, but work remains to be done in the rest of Pernod’s Scotch stable. Chivas Regal had halted its long-term U.S. slide in 2010 with a modest increase, but last year it slowed again, declining by 1.3%. Chivas has lost nearly 20% of its U.S. volume since 2005. During that time period, archrival Johnnie Walker has grown by around 10% in the U.S. market.

More troubling for Pernod USA may be the halt in progress for its largest brand, Absolut. After a buoyant 2010 in which it added about 150,000 cases in U.S. sales, Absolut, under pressure from proliferating “cheap-chic” vodkas like Svedka, Pinnacle and Sobieski, surrendered 60,000 cases in 2011, with trends deteriorating over the second half of the year. Pernod Ricard CEO Pierre Pringuet said today that the group intends to turn up Absolut’s volume with a new U.S. campaign in March, as well as new extensions Absolut Grapevine and Absolut Miami. But even as the economy suggests it may begin to put some wind behind brands like Absolut, competition in the vodka category appears only to be getting stiffer.

Pernod Ricard USA – Top 10 Distilled Spirit Brands
(thousands of nine-liter cases)
Calendar Year Percent Change
Brand1 2009 2010 2011 2009-2010 2010-2011
Absolut Vodka 4,485 4,630 4,570 3.2% -1.3%
Seagram’s Gin2 2,865 2,670 2,545 -6.8% -4.7%
Malibu Rum3 1,605 1,635 1,745 1.9% 6.7%
Jameson 815 1,035 1,335 27.0% 29.0%
Kahlua Liqueur4 1,030 1,000 985 -2.9% -1.5%
Hiram Walker Cordials 920 890 885 -3.3% -0.6%
Beefeater Gin 515 510 510 -1.0% 0.0%
Chivas Regal 395 400 395 1.3% -1.3%
Fris Vodka 260 360 385 38.5% 6.9%
The Glenlivet 285 310 330 8.8% 6.5%
Total Top 10 13,175 13,440 13,685 2.0% 1.8%
1 includes flavors
2 includes Twisted
3 excludes Cocktails
4 excludes Drinks to Go and Ready to Drink 


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