Pernod looks to Americas to overtake Diageo

23 September, 2011

Pernod Ricard is pinning hopes of further growth on the US, central and South America to undermine Diageo’s position as the number one drinks company in the world.

At present, the second largest drinks company in the world claims to be at least on a par if not larger than Diageo in nearly all markets outside the Americas. In the US, Diageo is three times larger plus there are other strong rivals such as Bacardi Martini and Beam Global.

“It is the only market where there is such a big gap,” Thierry Billot, managing director brands, Pernod Ricard told Drinks International.

Alex Ricard, who recently left Irish Distillers to become managing director of Pernod’s distribution network division, added: “We are co-leaders in virtually the rest of the world.”

The fact that Asia is growing faster than the US, puts Pernod Ricard in a strong position to challenge Diageo’s overall leadership.

“Long term Asia is more dynamic and the business is getting bigger and bigger," said Ricard. “The US is showing only moderate growth.”

Billot and Ricard acknowledged that the company is also “lagging behind” in central and south America. They believe that the acquisition of Absolut vodka which is a huge brand in the US, along with its strong whisky portfolio, including Chivas Regal, Ballantine’s and Jameson will see the company make significant inroads in the Americas.

In key markets such as Brazil and Mexico, Billot sees a thirst from younger drinkers for premium international brands at the expense of their own spirits such as tequila and cachaca. Nevertheless, Billot sees the joint venture which gives it access to ultra premium tequila brand, Avion, as an important addition to the portfolio.

Billot lists Absolut, whisky brands Chivas and Jameson along with Malibu as key brands in the company’s Americas onslaught. Also, Pernod’s Martell, is the number one cognac in Mexico. A major cognac brand is something Diageo lacks and that is a problem for the company in Asia.

Ricard added the new higher proof Malibu Fresh which is menthol as well as coconut, to Billot’s list.

The two senior executives see Absolut’s premium offering Elyx as the brand’s response to the luxury premium sector which appears to be dominated by Bacardi’s Grey Goose French vodka brand. Ricard said that Elyx is so good it should be drunk neat possibly with a “big ice cube and maybe a slice of lemon”.

Billot and Ricard are bullish about Pernod Ricard’s ability to build sales in the Americas and ultimately challenge Diageo’s claim to be the number one drinks company in the world.

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