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Pernod Ricard USA’s John Barrett On The On-Premise Recovery

August 8, 2022

Two and a half years after the initial outbreak of the pandemic in the U.S., the hard-hit on-premise market has made enormous strides toward regaining its pre-pandemic sales levels, fueled by consumers eager to return to bars and restaurants. While plenty of challenges remain—including inflation, supply chain struggles, and staffing, to name a few—on-premise operators are benefiting from pent-up demand and premiumization, particularly in spirits, as well as the extension of drinks-to-go measures in many markets. SND executive editor Daniel Marsteller recently caught up with Pernod Ricard USA chief commercial officer John Barrett to discuss the state of play in the on-premise.

SND: How are overall conditions on-premise as it currently stands, and how are you tailoring brand messaging specifically to that channel?

Barrett: We’re excited to see so many people returning to the on-premise this summer, visiting bars and restaurants at near pre-pandemic levels. We’re continuing to support our on-premise partners by drumming up excitement for our brands and cocktails. For example, Absolut recently introduced its “The World of Absolut Cocktails. Born to Mix.” campaign to both celebrate the freedom to mix and inspire everyone to come together respectfully and responsibly. The brand is continuing to work to incorporate the overall campaign look and feel into on-premise creative so that consumers see the campaign come to life across all the major touchpoints, from media to point of purchase. Additionally, we’ve been focused on the return of in-person events and activations in the on-premise. We saw incredible success with Absolut’s Coachella activation—Absolut.Land—which had over 260,000 visitors to the Absolut Coachella tent onsite and provided consumers with both an IRL and virtual opportunity to mix with us through a mirroring metaverse experience.

SND: Are you continuing to see on-premise consumers trade up to more premium spirits?

Barrett: Premiumization has been essential in driving U.S. spirits for years, but Covid has certainly amplified the demand. Consumer demand for premium spirits is soaring in the on-premise market. More than ever, consumers see the value in paying for more high-end and high-quality spirits to elevate the moments they choose to spend with their family and friends. We’re focusing on premiumization by leveraging the premium brands in our portfolio on-premise, such as Avion Cristalino, Jefferson’s Ocean, Rabbit Hole, Monkey 47 Gin, and others.

SND: How are you addressing the RTD cocktail trend in the on-trade?

Barrett: Ready-to-drink (RTD) offerings are one of the fastest growing spirits categories, and new consumers continue to fuel the trend. Last year, Drizly reported a 45% increase in the RTD category, and we expect the category to double in size by 2025. The spirits-based RTD segment could even hit 100 million cases per year in the same time frame. Some of our newest launches include Malibu Cocktails in a Can and Jameson Ginger & Lime. As drinks-to-go at restaurants and bars are legalized across the country, RTDs are an opportunity for bar and restaurant operators to expand their offerings. These are also an especially convenient option in locations like theaters, hotel minibars, and event spaces where there may or may not be a full bar.

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