Resilient sales of Pernod Ricard’s biggest spirits brands have helped it beat the wider decline of the UK’s off-trade.
A fall in value sales of 3% in the year to 30 June 2023 was markedly slower than the 5% decline of off-trade spirits overall, Julia Massies, Pernod Ricard UK MD, said this week.
She added the group’s biggest brands in the UK – Jameson, Malibu and Absolut – were in “some modest growth”, leading Pernod Ricard to increase its share of total off-trade in spirits to 7% in value terms.
According to The Grocer’s Britain’s Biggest Alcohol Brands report, Jameson sales have grown by 5.1%, to £72.8m. Absolut and Malibu registered more modest gains of 0.8% and 0.7% respectively [NIQ 52 w/e 22nd April 2023].
“It [the UK off-trade] is a relatively mature market where you’re probably not going see double-digit growth overall,” Massies said. “But you’ll have some growth and in particular, you see the growth when you look at the premium end of the market.”
Massies, who replaced the retiring David Haworth as Pernod UK’s MD earlier this month, said UK shoppers were not trading down to cheaper tipples even as their incomes were squeezed.
“There are some pressures on the consumer at the moment with inflation, but this is an affordable luxury,” she said. “An average bottle of spirit – even in the premium part of the market – is £20, maybe £25 once or twice per year.
“You might save on a holiday or a new car, but saving £1-£3 to trade yourself down on your preferred spirit brand is maybe not the immediate go to.”
Nonetheless, she said the group needed to keep one eye on the horizon, with recent duty changes adding “a pound on a bottle of spirits” before any customer margin on top.
“We’ll need to see how things stabilise,” she added.
Elsewhere, the head of Pernod Ricard’s Chivas Brothers scotch business Jean-Etienne Gourgues said “solid” price increases taken on Chivas Regal and The Glenlivet had pushed sales of the brands into reverse. Value sales for the unit were down by 4%.
A 70cl bottle of The Glenlivet 12-year-old single malt now sells at a pre-promotional price of £44 in Waitrose according to Assosia data, 10% higher than a year ago.
Chivas Regal 12, meanwhile, has climbed nearly 9%, to £30.50 in Sainsbury’s.
“The volumes are negative on those [brands],” Gourgues said. “But that is to be expected when you go for a significant pricing [action]; there is always a little bump which comes afterwards.”
However, he said Chivas Brothers felt positive about the year ahead, citing the return of whisky tourism and forthcoming innovation on The Glenlivet as reasons for optimism.
In the US, Pernod Ricard has debuted a duo of ‘Twist & Mix’ bottles for The Glenlivet in recent months.
The line – which Gourgues said would arrive in the UK next year – allows consumers to create bar quality cocktails by twisting the cap to release flavourings into a single malt whisky.
In the year to 30 June, Pernod Ricard’s value sales increased by 10% on an organic basis, to €12.14bn (£10.39bn). In the UK, sales were “flat-ish”, or up by 2% accounting for its Whisky Exchange business.
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