Pernod perked up by ‘strong’ UK market

The performance of Pernod Ricard’s UK arm has been “remarkable”, according to Gilles Bogaert, the French group’s finance director.

Gilles Bogaert, Pernod Ricard’s finance director, said the group was exercising its UK strategy “perfectly” (Photo: Pernod Ricard)

He said in London today: “In the last two years we gained share in the UK market, which is a remarkable performance considering the strength of the competition in the market. It has a lot to do with the quality of our team. We have had a very clear strategy and perfect execution, especially in the on trade. ”

He revealed that in the year to the end of June, the best performing countries in Europe for Pernod Ricard were Germany, Spain and the UK, “all of which grew at an outstanding pace.”

“We have been very disciplined on price and have done a very good job in increasing the share of Absolut vodka in the on-trade,” he said.

A focus on ‘occasions’

Denis O’Flynn, managing director of Pernod Ricard UK, told reporters: “Performance in the UK has been very strong. The strategy we adopted was structured on the idea of shaping the way the nation drinks.

“What we are trying to get to is that we need to do more than promote the product but focus on occasions – the shaping of the whole conversation of where and how our products are consumed,” he said.

As an example he gave the Ibiza Rocks promotion on the holiday island, which exposes 100,000 people between the ages of 18 and 24 to Malibu over 16 weeks each summer, 92% of whom are from the UK, “so it is absolutely the target market”.

Similarly the annual “Streets of Spain” promotion for Campo Viejo on London’s South Bank over the Spring bank holiday this year attracted 62,000 people to sample the wine in the context of a Spanish environment.

“This all translated into a very solid performance in the UK where we outperformed the market in both spirits and wines. The drivers were Absolut, Jameson, Malibu, Campo Viejo and Brancott Estate,” he said.

Outpacing the average

While the UK spirits market in the year rose by 3% in terms of both value and volumes, Pernod Ricard UK achieved a 10% volume increase and a 14% rise in value, reflecting increased turnover and higher margins.

In wines, while the UK market shed 1% in both volume and value terms, Pernod Ricard recorded 10% volume growth and an 8% increase in value.

Meanwhile, while the UK market for Champagne was stagnant, Pernod Ricard UK scored a 78% rise in volume and 70% increase in turnover, with Mumm’s volumes soaring by 81%.

Brand highlights were that Absolut vodka was the fastest growing spirit in the on-trade, Campo Viejo became Britain’s best-selling red wine with more than 1m cases, Brancott Estate was the top New Zealand brand and headed the white wine sellers list, Havana Club rum achieved the 100,000 case sales mark and Malibu returned to growth after eight years in the doldrums.

O’Flynn said that a key component of the UK performance was how the company fares in London. At the moment, he said, “London sales are growing by about 17% a year and we are growing at 23%.

The first two months of the new financial year have been “very solid” he said, and predicted that that trend will continue: “We are looking to a positive 2016”.