Pernod Ricard Sees Improvement In U.S., With Full Year Sales Up 4%September 1, 2016
After a flat performance in the U.S. market a year ago, Pernod Ricard has regained forward momentum, posting a 4% rise in net U.S. sales for its full fiscal year through June. With a revamped organization and strategy in place for the new 2016-2017 fiscal year—overseen by newly named CEO Paul Duffy—Pernod expects its U.S. fortunes to continue to improve.
In the year through June, Pernod’s U.S. sales continued to be driven by Jameson, which grew by 23% in Nielsen channels, as well as solid contributions from upscale brands The Glenlivet (+9%) and Martell (+25%) and a positive performance by Malibu (+2%). The Tequila category is also emerging as a key driver of premiumization for Pernod USA, with its Altos and Avión brands up double-digits and now combining for 300,000 cases at the premium and ultra-premium price points.
Pernod’s top U.S. brand, however, continues to be a work in progress. Absolut’s depletions were down 2% for the year, a slight improvement compared with a 4% drop a year ago. With Pernod pumping $10 million into the brand’s U.S. media support this summer, Absolut’s core Blue label and flavored vodkas have seen better trends lately, the company noted. Meanwhile, upscale extension Elyx is progressing in targeted on- and off-premise accounts.
Looking to build on the positive momentum, Pernod shuffled its U.S. leadership team effective July 1. Foremost, Paul Duffy, who helmed the U.S. unit from 2008-2012, has returned as CEO after chairing The Absolut Company in Sweden the past several years. But Pernod also made a number of other moves in its U.S. executive suite, naming former Pacific region managing director Julien Hémard to the newly created role of chief commercial officer, and shifting Jeff Agdern from head of Wines & Champagnes to the role of senior vice president, new brand ventures, a new “brand incubation” division. According to Pernod, the changes are intended to streamline the innovation process, more effectively target specific consumption occasions, funnel advertising and promotional funds to priority brands and markets and strengthen distributor resources, which will see a threefold increase in dedicated manpower.
Globally, Pernod’s sales rose 2% to €8.7 billion ($9.7b) on an organic basis in the year through June, with its Asia-rest of world and Europe divisions both up 1%. Profit from recurring operations grew 2% to €2.3 billion ($2.6b). —Daniel Marsteller