JC becomes UK’s only 1m case wine over £6

Pernod Ricard’s wine brands have posted a 6% organic growth in the 2012/13 financial year with Jacob’s Creek bouncing back to become the UK’s only million case brand with an average price over £6.

According to the group’s full-year sales results, all of its priority wines have posted positive global growth: Jacob’s Creek grew by 4%, Brancott Estate increased by 8% and Campo Viejo was up by 10%.

Furthermore, despite the fluctuating economy in Argentina, Graffigna saw a 13% increase in net sales per litre, and, according to Pernod, “strong results” in Canada and the UK.

Considering the UK market specifically, Denis O’Flynn, managing director for Pernod Ricard UK stressed that the group’s “good performance” in the British market at a breakfast briefing in London this week, attributing growth to sales increases for Spanish wine Campo Viejo, as well as whiskies Chivas Regal and Jameson.

Indeed, he said Campo Viejo “continues to storm ahead,” with 24% value growth and a 16% volume increase (Nielsen, total UK off-trade, MAT to 20.07.13).

He also noted that Jacob’s Creek is “now back in growth” in the UK, up 2% in value in the off-trade over the same period. This means that the Australian wine is now “the only million case brand with an average price over £6 in the market,” he stated.

Meanwhile, O’Flynn said that Brancott Estate had enjoyed a 24% rise in value sales to make it “the biggest selling Sauvignon Blanc in the UK”.

Attributing rising sales to both Pernod’s “premiumisation” strategy and “innovation”, he recorded the positive impact of the Jacob’s Creek Cool Harvest 10.5% abv Pinot Grigio launched on 13 July – a wine with an RRP of £8.56 which has tapped into the demand for both lower alcohol wines and the popularity of Pinot Grigio.

He also mentioned the success of Campo Viejo Garnacha, a varietal Rioja priced at £8.69 which was introduced on 13 August, while, for the future, he said that Pernod would be re-launching Graffigna in the UK as well as bring Brancott Estate Flight – a a 9% abv Sauvignon Blanc – to the market on 13 October.

Jacob’s Creek Cool Harvest 10.5% abv Pinot Grigio was launched on 13 July

Considering the global performance of Pernod’s wine portfolio, Jean‐Christophe Coutures, chairman and CEO of the group’s Premium Wine Brands division, recorded sales success outside the UK too.

“In its home market Jacob’s Creek grew in contribution by double digits, whilst simultaneously becoming India’s number one imported wine,” he said, before noting that Brancott Estate has grown both volume and value by 10% in the Americas region.

Speaking more generally about the importance of Pernod’s wine brands to the company, he commented, “The wine business continues to be a strong cash contributor to the Pernod Ricard business.

“During 2013, the cash conversion factor for the wine business was close to 100% (compared to base of contribution) driven by top line growth and stock level optimisation, despite maintained cash investments behind the brands (via A&P and capital expenditure).”

He also noted that Pernod has “continued to rationalise its operational footprint during the year through the completion of several non‐strategic asset disposals”.

These include the Coolabah brand from Australia, the North Island vineyards and Hawke’s Bay winery in New Zealand, and, in Spain, Pernod’s low value table wine business and Valencia bulk winery.

More detail on each of Pernod’s priority wine brands can be found over the following pages.

Australia ‐ Jacob’s Creek

Volume sales rose by 12% for Jacob’s Creek in Asia

In its home market of Australia, and despite a difficult retailer environment, Jacob’s Creek grew contribution by 12%, not only retaining, but consolidating its position as the number one branded bottle wine by both volume and value**.

Strong growth was also evident in Asia where volume rose by 12%, mainly led by China. Jacob’s Creek now has a significant foothold as the second largest premium imported wine*** thanks to regional expansion.

With net sales up 15%, Thailand is one of the top three contributors in Asia (behind China and Japan), with India also growing at 33%.

In the UK the brand continues to “premiumise” despite adverse currency conditions, with some promising growth in Russia and Poland.

Jacob’s Creek grew incremental profit through the launch of a number of market specific innovations including Wah, a wine to be paired with Sushi in Japan, Earth.Vine.Grape an organic wine for the Nordics region and 1837 Solway, a China specific blend.

* IWSR data – 2012 volume analysis
** Aztec Australia data – MAT to 7th July 2013
*** IWSR data – 2012 volume analysis where Premium is defined as bottled wine sold above 100 RMB per 750ml

New Zealand ‐ Brancott Estate & Stoneleigh

Brancott Estate has just launched Flight – a low abv Sauvignon Blanc

Following the global roll out of a new brand name, packaging and advertising campaign in FY12, Brancott Estate has enjoyed a 3% rise in volume and 8% jump in contribution.

In several key markets, Brancott Estate & Stoneleigh strengthened their position: net sales jumped 20% in the UK, 27% in Sweden and 9% in Canada.

In the Americas alone the brands grew by 10% in volume and value. Despite maintained private label pressures in Australia, contribution continued to grow in the Pacific region.

Spain ‐ Campo Viejo

Campo Viejo Garnacha – a varietal Rioja priced at £8.69 – was launched on 13 August

It has also been a notable year for Campo Viejo with the brand growing by 10% in both volume and value, against global Spanish wine volume growth of only 3%.

Campo Viejo has become the fastest growing Spanish bottled wine brand above 1 million cases* according to the IWSR.

Continued investment in the brand has resulted in net sales growth in EMEA of 15%, led by the UK which continues to accelerate, posting net sales of +20%.

The brand has also broadened its footprint, achieving strong growth in markets such as Russia (volume +36%), Mexico (+6%) and Switzerland (+23%).

Campo Viejo is the second‐largest Spanish still wine brand in terms of value in the US and continues to grow +12% in a category that has only risen by 7% this year in this market**.

* IWSR data ‐ 2012 volume analysis
** Nielsen US data ‐ MAT to 22nd June 2013

Argentina ‐ Graffigna

Pernod is re-launching Graffigna in the UK

Despite a volatile economy in its home market of Argentina, Graffigna continued to record good results in North America. In the key US market, Graffigna saw volumes increase by 49%* during the last year through initiatives such as a partnership with glassmaker Riedel, which createda wine glass specifically for Malbec.

Aside from the Malbec trend the brand also continues to benefit from its alignment with other key varietal growth drivers, namely Pinot Grigio in Canada growing volumes at +21%** year on year.

* IWSR 2012 vs. 2011 and internal estimate
** OTC Canada data – MAT to April 2013