Pernod Ricard confident premium spirits can thrive in economic downturn
Pernod Ricard reported a 10% rise in UK spirits sales for the past year as launches such as Beefeater Pink and Beefeater Blood Orange proved successful.
The supplier has been urging the trade to champion premium spirits for many years and the strategy is now bearing fruit.
The UK is perilously close to slipping into recession, but Pernod Ricard UK managing director David Haworth is confident its premium portfolio can continue to flourish.
He told DRN: “There is still a lot of headroom for spirits in general. Spirits in comparison to beer and wine will continue to flourish. Whether it continues at the super-premium price point in the short term is the question.
“My view is that, despite the economic uncertainty, we have planned for a super-premium-plus consumer, because the trend for drinking less but drinking better is going to continue.
“Our portfolio is very well placed for that. Our plan for the next three to five years is that the UK will remain a dynamic spirits market and there will be the potential for some brands to really break out.
“At the premium and super-premium end, I still think that will continue. In the short term there may be a couple of hiccups, but longer term I think the dynamism of the market is always going to be there.”
The firm has pledged to invest £5 million in marketing ahead of Christmas, nearly 70% more than it spent over the festive period in 2018.
Retailers need to plan carefully for the different festive shopping missions that will occur from October through to Christmas, according to Pernod Ricard UK. It will be focusing on six brands: Kahlua, Jameson, Chivas Regal, Glenlivet, Plymouth gin and Campo Viejo.
Chris Ellis, commercial director, said: “We have been saying for years that Christmas is all about October, November and December.
“This is still true but now we are saying the same strategy doesn’t work all the way through to Christmas.
“It is a different mindset from saying Christmas is 12 weeks long. Now we are talking about the different ways the occasions blend over time.
“October is the time to get ready for Christmas and it is all about the occasion we call pantry loading, when people start stocking up.
“After October it changes. When the first Christmas ads occur in mid-November, that is when it is really important that retailers are on their game as this is the time when it is all about hosting.
“After that it is Black Friday and Christmas party season. From mid-December the gifting occasion is the most important.
“We are also highlighting the occasions we are calling ‘popping in’, where from mid-December there is a rise in the number of people popping
into their friends’ and family’s houses with a bottle of something.”
Chris Shead, off-trade channel director, said: “The premium spirit market is in good health and 65% of the growth in spirits is from premium spirits.
“Over the 12 weeks of Christmas in 2018, grocery grew 12.5% in premium but convenience only saw a 2.3% growth.
“Most of the growth in spirits in convenience came from standard spirits.
“Christmas is a key time when you need to get premium spirits right and we are calling that in particular for the impulse channel.”