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Campo Viejo “star of the moment”
With all the focus on Pernod’s premium spirits performance, it’s interesting to see positive results for its wines too, particularly Campo Viejo.
Figures for the 2011-12 financial year show a 4% net sales growth for the company’s priority wine brands, with Campo Viejo driving increases.
The latter brand is up 11% in net sales and has enjoyed a volume growth of 100,000 cases, half the group’s total volume increase for wines, which are up from 10.6 million 9-litre cases in FY 2010/11 to 10.8m cases in this financial year (see table below).
Speaking at yesterday’s press conference, Gilles Bogaert, managing director for finance at Pernod Ricard, said that the company’s focus on “premiumisation” in spirits was applicable to wine too, and as a result, in markets like the UK, the group had “accepted some volume losses.”
On the other hand, emerging markets have provided Pernod with a source of profitable growth, and Bogaert said China was now the third largest market for Jacob’s Creek.
He added that the emphasis at Pernod in wine was on “four brands from four regions: Jacob’s Creek from Australia, Brancott Estate from New Zealand, Campo Viejo from Spain and Graffigna from Argentina.”
Meanwhile, managing director of Pernod Ricard UK, Denis O’Flynn, echoed Bogaert’s comments, saying Pernod’s UK approach was a “value strategy” before describing Campo Viejo as “the star of the moment.”
Sales growth in the UK has been achieved for the brand, despite the fact O’Flynn said it is “trading at £2 above the average price for Spain,” referring to the retail sector.
He summed up, “We are trying to bring value into the category.”
As a further example, he added, “We are investing in the equity of the Jacob’s Creek brand – and we believe once the Australian dollar rectifies itself, we will be in a great position to benefit from that.”
Finally, when talking about Champagne at the end of yesterday’s conference, Bogaert stressed his high hopes for sales of the sparkling product in China.
“China is now our number three market for Champagne worldwide and we are co-leader in the market – which is not something we can say in all countries – thanks to our strong route to market [in China],” he said.
Continuing, he commented, “It’s a market where we have ambitions, and it’s a very premium market.”
Pernod Ricard’s strategic wine brands:
Brand Vol (FY 2010/11) Vol (FY 2011/12) Net sales organic growth
Jacob’s Creek 6.9m 9l cases 6.9m 9l cases 2%
Brancott Estate 1.8m 1.9m 2%
Campo Viejo 1.6m 1.7m 11%
Graffigna 0.3m 0.3m 28%