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Interview, Part 1: Pernod’s Wine Unit Looks To Accelerate Growth

October 15, 2020

Within a portfolio that includes multi-million-case spirits giants like Jameson Irish whiskey and Absolut vodka, it’s easy to forget that Pernod Ricard USA has wine volume of nearly 2 million cases annually. While top brand Jacob’s Creek is fighting uphill amid difficult conditions in the Australia category, Pernod has seen strong gains for brands like G.H. Mumm Champagne and Spain’s Campo Viejo lately, with the latter earning Impact “Hot Brand” honors earlier this year after roughly doubling in size to more than 300,000 cases over the past three years. SND executive editor Daniel Marsteller recently spoke with James Slack, senior vice president of Wine, Champagne, and Prestige at Pernod Ricard USA, to hear about what’s ahead for the wine portfolio.

SND: How are conditions, broadly speaking, for Pernod’s key Champagne and wine brands as we begin the fourth quarter?

Slack: Ultimately, our portfolio is a premium portfolio, which really plays above $11. At the end of February, we were beating the market in volume and value growth. Then obviously Covid hit, and the growth areas of our portfolio—premium wine, Champagne, and sparkling—were really hit. But people have gotten used to eating at home, drinking at home, and we’re seeing a real acceleration again in Champagne and sparkling. It’s been phenomenal growth over the last 13 weeks, with value growing ahead of the market at 32%. People are recognizing that instead of buying a bottle of G.H. Mumm for $120 in a restaurant, they’re able to pick it up for $45 in an off-premise environment and drink it at home. We’re seeing that across the category, and our key brands of G.H. Mumm, Perrier-Jouët, and Mumm Napa are now performing very well.

SND: To what degree is that off-premise bounce making up for the on-premise closures?

Slack: It’s not quite offsetting the on-premise, because when you’re seeing a 55% decline in that area, it still remains challenging. We get excited when a market starts to reopen, and then as quick as they reopen, they close down again. Our biggest challenge is making sure that we’ve got supplies in the right place, for the right customers, at the right time. But overall the message is positive. Our brands are getting out there, they’re getting into people’s hands, and the premiumization trend is continuing, just in a slightly different format.

SND: How has the wine and Champagne unit leveraged DTC, e-commerce, and other post-Covid trends taking hold in the market?

Slack: The e-commerce category for alcohol in this country has moved forward three to five years in the last six months. We’re fortunate because we started to really drive this area a couple of years ago. G.H. Mumm, Mumm Napa, and Perrier-Jouët have strong DTC e-shops. If you take G.H. Mumm, for example, in the e-commerce sector we’ve got a lot happening around specific value-added packs, which include good Champagne glasses and things like that. We’re making sure that Drizly, ReserveBar, and our key customers have the right offerings to continue to excite our consumers. With Mumm Napa, we’re seeing very strong uplifts in our loyalty programs that we have through our members clubs. That’s where we need to put our energy and focus, because at Mumm Napa we have a great brand experience and we get about 120,000 visitors a year. For obvious reasons that’s not happening to that level right now.

 

Pernod Ricard USA—Top Ten Wine Brands

(thousands of 9-liter case depletions)

Rank Brand Origin/Type 2018 2019 Percent
Change1
1 Jacob’s Creek Australia 493 462 -6.2%
2 Mumm Napa California 353 348 -1.4%
3 Kenwood (Still) California 349 317 -9.2%
4 Campo Viejo (Still) Spain 200 215 7.6%
5 Brancott Estate New Zealand 224 207 -7.6%
6 Campo Viejo Cava Spain 63 102 60.7%
7 Kenwood (Sparkling) California 74 72 -2.0%
8 Perrier-Jouët France 78 47 -39.8%
9 Lillet France 40 45 14.2%
10 G.H. Mumm France 27 36 35.4%
Total Pernod Ricard USA 1,912 1,856 -3.0%
1 Based on unrounded data.
Source: IMPACT DATABANK © 2020
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