Interview: Pierre Pringuet, CEO, Pernod RicardDecember 19, 2014
French spirits giant Pernod Ricard has undergone one of the drinks industry’s most dramatic expansions over the past 15 years—a transformation that coincided with the tenure of top executive Pierre Pringuet, who became the company’s co-CEO in 2000 and CEO in 2008. Following a series of blockbuster acquisitions in the 2000s—including Seagram (with Diageo) in 2001, Allied Domecq (with Fortune Brands) in 2005 and Absolut in 2008—Pernod has grown from being a mainly European powerhouse to become the second-largest spirits player worldwide. Company volume rose 4.2% to 128 million nine-liter cases in 2013, according to Impact Databank, while net sales were flat organically at €7.95 billion ($9.76b) in its fiscal year through June. With Pringuet set to hand the CEO reins to Alexandre Ricard on February 1, Shanken News Daily senior editor Daniel Marsteller met recently with the departing chief executive to discuss Pernod’s long-term progress and its opportunities for the future.
SND: How would you assess Pernod’s journey over the past 15 years, from inside the cockpit, so to speak?
Pringuet: It’s been like living a dream. The last decade and a half was an incredible period in which we increased the size of Pernod Ricard more than five-fold. Adding up our three major acquisitions—Seagram, Allied Domecq and Absolut—you get a total investment of $25 billion. Operationally, the last 15 years marked a great leap forward, and for shareholders they were very productive as well. While our sales quintupled, our profits increased seven-fold. Looking at the added value, the market cap of Pernod Ricard in 2000 was €3 billion ($3.68b), and today it’s anywhere from €24-€26 billion ($29b-32b). Very few companies can say they’ve made such a transformation. In the U.S., which is now Pernod Ricard’s largest market, our volume has grown from 2 million cases in 2000 to about 17 million cases this year.
SND: With those significant strides behind you, what do you see as Pernod’s opportunities for expansion looking ahead?
Pringuet: In the foreseeable future, our growth will come both organically and through bolt-on acquisitions. A good example of the latter would be Avión Tequila. We now have a controlling share of that company, and the brand is growing at strong double-digits in the super-premium Tequila segment. Also, last summer we acquired Kenwood Vineyards in Sonoma Valley, an excellent California wine brand. That’s the sort of acquisition we could think about, and there could be others in the future. But what is equally if not more important is generating organic growth. That will depend on our growth drivers, like Jameson, The Glenlivet, and on a smaller scale Avión. Another very important product in the range moving forward is Elyx, the super-premium version of Absolut.
SND: How have the global spirits market and the consumer outlook changed during your tenure?
Pringuet: I think the market is probably more challenging, and the consumer more versatile. Consumers remain loyal to brands, but rather than staying with one single brand or a few of them, they now have more diverse consumption patterns, which are based on the occasion. And so we’ve changed our approach to the market. Instead of approaching brand by brand, we’re now managing the portfolio depending on the occasion and the venue. It’s crystal clear that if you’re in casual dining or a luxury restaurant, if you’re in a disco with loud music or a lounge bar, your choice will vary from one occasion to another. So the question is how to approach each venue with the right portfolio.
SND: What are your personal plans for the future?
Pringuet: I’m already on the board of different companies and will enter into more boards. And I’m participating in a fund that’s in the process of being created—unfortunately I can’t give any specific details on that. I’m also becoming the chairman of Agro Paris Tech, the major university for agriculture, agronomics and agro industries generally speaking. I expect I’ll keep a good diary.
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