Interview, Part Two: Pernod Ricard CEO Alex RicardMarch 27, 2015
In Part Two of Impact’s exclusive interview with Alex Ricard, Pernod Ricard’s new CEO discusses his plans to revitalize Absolut and Chivas Regal in the U.S. market, and touches on the company’s flurry of activity in its wine business.
SND: Absolut has been struggling in the U.S. in recent years. How do you plan to reinvigorate the brand?
Ricard: Vodka is still the largest spirits category in the U.S. market, and Absolut is the import leader. Admittedly, the category is soft, and this is why we’re investing behind Absolut, particularly with our “Meet Perfection” campaign. Perhaps consumers don’t realize the uniqueness and quality of the product. It’s a single-source, single-community vodka, with every drop coming from Åhus, in the south of Sweden, where winter wheat grows. We also have significant visibility initiatives at point-of-sale in both the off-trade and on-trade. And we’re premiumizing the franchise as well with heavy investment behind Absolut Elyx, which is crafted in a 1921 copper pot still. We call Elyx “liquid silk.”
SND: Blended Scotch appears to be in a holding pattern, or even declining somewhat. How do you see the long-term prospects for the category?
Ricard: The long-term prospects are solid. With Chivas, we’ve had some issues because of the slowdown in China, but over time that will stabilize, so Chivas’s prospects are good. We’ve also undertaken some new initiatives. We’ve just launched a line extension called Chivas Extra, the brand’s first since 2007. Chivas Extra is positioned between Chivas 12 and 18, and is now rolling out globally. We’ve also launched our first-ever full social media campaign on Chivas with TheVenture.com. It’s basically a call to action to all social entrepreneurs to submit their projects. The winner will be brought out to Silicon Valley next July, and will get a million-dollar sponsorship for his or her social enterprise.
SND: Jameson has enjoyed impressive growth for years, yet it remains far smaller than other big-name global whiskies. How much upside do you think it has left?
Ricard: We think Jameson still has a lot of room for growth. About a year ago, we inaugurated a €100 million ($112m) expansion of its distillery. It’s an extremely appealing brand to premium spirits consumers around the world, and is growing in every region—not just the Americas. Jameson has been successful because it’s not just a category play—it’s a brand in its own right. Consumers don’t call for whiskey, they call for Jameson. It’s a great product—triple-distilled, especially smooth—with an incredible 235-year history. We communicate that in a very edgy, contemporary way. So the sky is the limit for Jameson.
SND: Last summer, Pernod Ricard bolstered its wine business with the acquisition of California brand Kenwood from Sonoma County. Going forward, what role will wine play in your overall portfolio strategy?
Ricard: We have leading brands from an array of key origins—Jacob’s Creek from Australia, Brancott Estate from New Zealand, Campo Viejo from Spain and Graffigna from Argentina, among others. But we had been lacking a California still wine, and that had become a drawback for our wine business, particularly in the U.S., where California wine accounts for nearly 70% of overall consumption. So we did the Kenwood deal (Pernod Ricard acquired the winery from F. Korbel & Bros. last spring) and it gave us a high-quality Sonoma offering. We’re also focusing on innovation in wine, because that’s been such an important growth driver. For instance, we recently introduced Brancott Flight Song, a low-alcohol product (9% abv), in the U.S., as well as two new additions to the Jacob’s Creek line: Double Barrel, which is finished in whiskey casks, and Two Lands, which we call a California expression of an Australian wine. So we’ve got a lot going on in wine.
The full interview with Alex Ricard appears in the March 1&15 issue of Impact.
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