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With Leadership Change, Pernod Ricard Looks To Accelerate U.S. Growth

November 8, 2019

In case you missed yesterday’s news alert, Paul Duffy will step down as chairman and CEO of Pernod Ricard North America effective December 2, and will be replaced by consumer goods veteran Ann Mukherjee.

Duffy spent a total of seven and a half years as head of Pernod’s U.S. unit, including a stint from 2008-2012 in addition to his more recent tenure, which began in 2016. Under Duffy’s leadership, Pernod saw its Jameson Irish whiskey become one of the U.S. market’s hottest spirits brands, expanding from just 690,000 cases in 2008 to nearly 3.5 million cases in 2018, according to Impact Databank. It also boosted its presence in American whiskey with a series of recent acquisitions—including Rabbit Hole, Jefferson’s, Smooth Ambler, and others—while developing growing brands in other categories, including The Glenlivet single malt Scotch, Altos Tequila, and Martell Cognac.

But Pernod’s overall U.S. growth continues to be hobbled by Absolut vodka, which has shed more than a half-million cases since 2015 and will likely be overtaken by Jameson as Pernod’s largest brand in the U.S. by year-end. Despite Pernod’s efforts to turn the Swedish vodka label around, Absolut continues to decline, with control state volume down 3% in the year to date through September. The growth of Jameson (+5.3%), Malibu (+4.4%), Altos (+15%), The Glenlivet (+1.4%), and Martell (+25%) offset Absolut’s struggles in control states over the first nine months of the year, but only barely, with the company’s overall volume up just 1% in NABCA channels during the period. Total control state spirits volume registered 3.8% growth over the same timeframe, outpacing Pernod’s portfolio.

In announcing the U.S. leadership change, Pernod chairman and CEO Alex Ricard said Mukherjee’s marketing and commercial expertise—including senior posts with Frito-Lay, PepsiCo, and S.C. Johnson & Son—will be crucial in “achieving our first and foremost objective: to accelerate our growth in our number one market, the United States.”

Notably, Pernod went outside the company to make this hire—a departure for a firm known for cultivating talent within the organization and then rotating its executives amongst its various global operating units. Beginning late last year, however, Pernod came under pressure from activist investor Elliott Management Corp, which had built a 2.5% stake in the company and demanded “outside perspectives” to help sharpen its performance. Shortly thereafter, Pernod added longtime Artémis CEO Patricia Barbizet to its board, gaining a new independent voice within the group. The appointment of Mukherjee to helm its 15-million-case U.S. business marks another step in that direction.—Daniel Marsteller

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