Pernod Ricard focus shifts to wine trends

Following lockdown developments in wine consumption, the spirits giant has new plans for its off-trade presence.

Spirits giant Pernod Ricard has revealed plans to ramp up its focus on the UK wine sector as a result of trends that developed during the coronavirus lockdown. The Jameson, Absolut and Chivas Regal supplier currently has a 3.7% share of the wine market, thanks largely to Campo Viejo and Brancott Estate. Jacob’s Creek sales have plummeted over the past few years after Pernod Ricard made a conscious decision to stop playing the volume game in the Australian wine category.

Its wine sales are concentrated in the off-trade, which has thrived during 2020, and it now sees an opportunity to capitalise further on this. Pernod Ricard UK will launch brands and SKUs in a bid to increase its market share and drive value sales.

UK managing director David Haworth told Drinks Retailing: “We haven’t really talked about wine much, other than to say we have the number one red wine [SKU] in Campo Viejo, and the number two white in Brancott Estate. We have seen our share stabilising at 3.7%.

“When you look at the development of wine, you can see recently that there have been very few sales in the on-trade, so the off-trade wine category has boomed. We have a new focus on wine, we have a new portfolio director in Lucy Bearman and we have a lot of innovation in the pipeline, which you’ll hear a lot about in the next six months.

“The wine opportunity for us has changed quite dramatically. We were looking at our wine strategy, given that Jacob’s Creek has declined dramatically over the past three years – on purpose – but there is now money to be made in wine, and in particular the off -trade and ecommerce.

“That value proposition is increasing, because we don’t sell very much wine in the on-trade. As that has moved to the off-trade, we can play the wine card as well at Pernod Ricard.”

Pernod Ricard has achieved a record 6.5% share of the UK spirits sector, according to Nielsen data, up from 5.7% a year ago. That followed a strong off -trade performance during the lockdown. Nielsen figures show its portfolio grew 20% over the 12 months to June 30, which represented the end of its financial year. In the final 12 weeks, sales were up 54%, significantly outperforming the market thanks to strong growth from Beefeater, Absolut and Jameson.

Haworth said the focus is firmly on growing value sales and market share over the next 12 months.

“We expect growth in off -trade, ecommerce and on-trade,” he said. “We have the right people and the right brands, we have a low percentage share, and we should be growing it. If not I would be very disappointed.”

Ecommerce will remain a major focus in the months ahead. Ian Peart, the fi rm’s new commercial director, said: “There has been an acceleration of ecommerce during the lockdown period and those consumer buying habits to a large extent will be maintained. We have a big team working on that side of our business.

“We have had 92% growth on spirits in ecommerce, ahead of the market at 58%. It’s a really robust market, but we’re exceptionally pleased

that we outperformed, with our big brands doing exceptionally well in that environment. We have been working for a number of years with key partners to make sure our presence and visibility is good on those sites, so I’m sure that will continue to grow.”

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