corporate profile

staying strong in a soft economy while building for the future

But it isn’t all doom and gloom. Consumers are drink-ing the same amount of alcohol, Duffy reminds, and the off-premise was up 2.9% in 2008. And while value brands have undoubtedly increased in importance, the trend towards premiumization still continues—premium products were up 3.7% last year and there is still ample room for growth.

On the heels of a successful integration of the Absolut Vodka brand—which made the company the number two spirits and wine company by value—Pernod Ricard is poised to take advantage of these growth opportunities. Working with their wholesale and retail partners, the company has developed an aggressive, multi-platform strategy to weather the current economic storm as well as build long-term value and strong brands.

like virtually every other industry, spir-it and wine suppliers are operating in a challenging economic landscape to-day. Pernod Ricard USA’s Chairman

& CEO, Paul Duffy, recently outlined exact-ly how these challenges affect the industry: the credit squeeze has caused many retailers to de-stock inventories, and on-premise busi-ness was down 2.2% in 2008, and likely to decline further.

a powerful route to Market“Pernod Ricard USA is building on the acquisition of the top premium vodka in the U.S. to establish a world class route to market,” says Duffy of the company’s recent dis-tributor realignment in major mar-kets throughout the U.S. By consol-idating the company’s brands with one distributor in most markets, Pernod’s portfolio—particularly now that it contains ABSOlUt—will gain leverage and efficiencies which will make the brands more competitive. teaming up with Southern Wine & Spirits and Republic National Distribution Com-pany in 35 markets nationwide, this strategy “will help our expanded portfolio stand out in the marketplace,” said Jim Evans, Senior Vice President, Sales, Pernod Ricard USA. He also calls the shift “game-changing” as it will build value and advantage for Pernod Ricard, as well as their retail customers.

consuMer engageMent & on-preMise activation “Now more than ever, consumers want to fall in love with brands that are meaning-ful to them and their lifestyles,” said Patrick Piana, Senior Vice President, Spirits Mar-keting at Pernod Ricard USA. “So, we are working hard to capture their hearts – and their imaginations – with engaging 360 de-gree campaigns combining edgy advertising with memorable, personal experiences.” Piana added, “It’s all about creating lively

relationships with our consumers, and a key way for us to do just that is through another element of our strategy – on-premise activa-tion. Although the on-premise is down, it is where brands are built, so we will continue with our targeted efforts, focused on getting the best return on our investment. Our goal is to recruit new consumers, to in-

crease existing consumer loyalty and bring our brands alive, through tastings, menus, signage and sponsored events.” With on-premise ambassadors working in accounts, and the innovative BarSmarts program which educates and certifies bartenders in key markets on making cocktails with Per-nod’s products, Pernod Ricard has identified efficient, yet high-impact methods for keep-ing their brands strong on-premise and sup-porting restaurants and bars.

Building Brand valueWith leading brands in virtually every cat-egory, Pernod Ricard will be focusing on—and heavily supporting—its key brands in the U.S., many of which are already bucking category trends.

Jameson, a brand doing phenom-enally well (see box on next page) is backed by an engaging, highly unique advertising campaign featuring the

tagline, “Or, It Could Just Be the taste.” “the brand’s smooth

taste makes it appealing and accessible to consumers – it’s smooth and not as harsh as some other brown spirits,” Piana said. “Jameson is also a discov-ery brand, young in its life cycle with great opportunity for con-tinued strong growth.”

Jameson has been conduct-ing a trade advertising cam-paign to stress how on- and off-premise accounts can boost

MaliBu island Melon hits u.s. shoresthe newest Malibu flavor—Malibu island Melon—will be hitting retailers nationwide this May. this vibrant, caribbean flavor fits beautifully with Malibu’s brand imag-ery, and will stand out as a unique offering, as there are few competitors with this flavor. Backed by a substantial media campaign, including television, consumer and trade print, as well as outdoor, the line extension will also benefit from creative pos like recipe cards, consumer give-away, bottle-neckers and shelf talkers. the national launch campaign, which will target both genders in on- and off-premise channels, will feature an extensive sampling program.

aBsolut goes tropicalthis spring, absolut is adding aBsolut Mango to its successful portfolio of flavors. already in the south american market, and performing well, the new flavor is poised to boost sales for on- and off-premise retailers in the u.s. this spring and summer. Mango is the most popular fruit in the world and a staple in asian and latin diets, and absolut is the first major vodka brand to launch this flavor. it is kicking off with $5 million in support, including advertising, sampling and point-of-sale.

“pernod ricard usa is Building on the

acquisition of the top preMiuM vodka in the

u.s. to estaBlish a world class route

to Market.”- paul duffy, chairMan & ceo,

pernod ricard usa

profits during the economic crisis. Pernod Ricard recently unveiled the first-ever Cat-egory Management Selling tool for the Irish Whiskey segment, which will provide accounts with clear and simple things they can do to leverage the growth of the fastest growing spirits category.

ABSOlUt remains the #1 revenue producing imported vodka in off-premise sales and is seeing a distribution boost now that it is handled by Pernod Ricard’s own sales force and its newly aligned wholesaler network. In February, the brand launched its most recent television campaign, debut-ing during the broadcast of the Grammy Awards, appearing on 16 CBS affiliate sta-tions. “Each ad in the ‘In an Absolut World’ campaign represents an answer to the ques-tion, “What if everything in the world were approached the same way ABSOlUt ap-proaches vodka?,” says Piana. “In doing so, we are presenting a view of the ideal – or ABSOlUt world – from the ideal or AB-SOlUt – vodka.”

Other brands to keep an eye on in the Pernod portfolio include the Glenlivet, which was up 7.2% last year, despite an overall decline in the single malt catego-ry. It represents nearly one of every three bottles of single malt consumed each year and has grown 35% over the past five years. Chivas Regal is launching a tV ad cam-paign this month behind Chivas 18, which

is growing by double-digit rates in target markets. And Kahlúa, which recently gained share in selected markets after in-creased investment in tV advertising and related promotions, is expected to apply those lessons in the months ahead. Pernod Ricard also has several new line extensions hitting the market this year. In addition to Absolut Mango (see box on prior page) and Malibu Melon (see box on prior page), Seagram’s Brazilian Rum and Beefeater 24 will be launching this Spring.

a continued focus on preMiuM, and a renewed eMphasis on valuePernod Ricard’s portfolio is strong across the price spectrum, and today’s value-seeking

consumer will find many excellent, well-priced bottles in their line-up. “Some great examples of value in our wine portfolio in-clude Brancott Classic Sauvignon Blanc 2008 and Jacob’s Creek Reserve Shiraz 2006, each of which just received ‘Best Value’ rat-ings (89 points) from the Wine Spectator,” says Stephen Brauer, General Manager, Per-nod Ricard USA Wines and Champagnes. “In this economy, the ‘best value’ accolade is more important than the cellar selection accolade.” Brauer added, “Despite the econ-omy, people still will mark the profound mo-ments in their lives – whether it’s falling in love, or celebrat-ing an anniversary – with a brand whose values transcend economic cycles, like Perrier Jouet Champagne.”

At the end of the day, premium spirits and wines remain an affordable luxury, says Duffy. He concluded: “Although growth for some brands is at a slower pace in the current envi-ronment, we believe our premium products will continue to flourish over the long term, since they over-deliver in quality and value at every price point.” n

“now More than ever, consuMers want to fall in love with Brands that are Meaningful to theM and their lifestyles.”- patrick piana, senior vice

president, spirits Marketing, pernod ricard usa

A Jameson Irish Whiskey projection

ad in New York City.JaMeson on fireperhaps no brand defies the economic slowdown like Jameson. with a 30% increase in value over the last six months, Jameson is growing faster than it ever has, setting depletion records across the country. it is the primary driver of the irish whiskey category with two-thirds of the market share. it is the fastest growing premium brand with sales of over 500,000 cases. thanks to Jameson, irish whiskey is the fastest-growing spirits category in the u.s. market.