Pernod Brass Talks Malfy Acquisition, Jameson & Route to Market
Pernod Ricard reported 3% sales growth in the Americas for the first nine months of fiscal 2019. In the US, the company is growing in line with the overall market, but shipments in the US were impacted by the company’s wholesaler inventory optimization initiative, which kicked off in Q3.
MORE COLOR ON MALFY ACQUISITION. Yesterday, Pernod announced the acquisition of Malfy gin from Biggar & Leith for an undisclosed sum [see WSD 04-17-2019].
On this morning’s earnings call, managing director-finance, IT and operations Helene de Tissot said this acquisition is “very consistent with the strategy in terms of active portfolio management,” adding, “It’s very clear that what we are looking for are brands with already kind of a good growth trajectory with strong potential” and “will create a significant value for our shareholders.”
ON JAMESON SLOWDOWN. Several reports surfaced earlier this year pointing to a decline in sales for Jameson in the US in March.
When asked about the drop in sales, Helene said tough comps were a major factor. For instance, St. Patrick’s Day fell on Sunday this year compared to Saturday last year and last year they launched Jameson Caskmates IPA. Moreover, the average price of Jameson was up 2.6% for the month. All that pointed to -3% sales trend in March.
But Jameson still continued strong growth for the nine-month period in the US, according to Helene, and they still envision double-digit growth for the brand.
Helene also shared a bit more color on the strategy for Jameson moving forward. “We are rebalancing investment strategy throughout the year to be less reliant on St. Patrick’s Day,” she said.
OTHER BRAND PERFORMANCE. Absolut is still in decline. Pernod plans to launch a new campaign in the near future to bolster the brand called “Planet Earth’s Favorite Vodka.” In addition, in Q4 they will launch Absolut Juice.
Martell and Glenlivet Founder’s Reserve were up double digits in the US. Helene also noted that Monkey 47, Smooth Ambler and Del Maguey also showed strong performance in the US for the nine-month period.
INVENTORY OPTIMIZATION. You may recall, Pernod recently announced long-term distribution agreements with Southern Glazer’s Wine & Spirits and Republic National Distributing Co. As a result of the renewed/extended contracts, the company announced a wholesaler inventory optimization plan in February [see WSD 02-07-2019].
The inventory optimization initiative kicked off in the third quarter, and shipments reflected that in Q3 results, according to Helene. She said it should represent two weeks of sales in the second half and the plan is to complete the initiative by the end of June.
LOOKING AHEAD. “Growth was very strong and diversified in the first 9 months of FY19, responding to our long-term investment strategy. For full year FY 19, in an environment that remains uncertain, we aim to continue dynamic and diversified growth across all our regions and brands,” says chief Alex Ricard.
EU TARGETS WINE IN LATEST ROUND OF TARIFFS
Last week, the Trump Administration threatened the European Union with tariffs on $11 billion of EU products, including wine, as part of a 14-year long dispute between the US and EU over aircraft subsidies [see WSD 04-09-2019]. In response, the EU proposed tariffs on $20 billion of US goods yesterday, including wine, tobacco, essential oils and handbags, among many others.
“While we need to be ready with countermeasures in case there is no other way out, I still believe that dialogue is what should prevail between important partners such as the EU and the US, including bringing an end to this long-standing dispute,” said EU Trade Commissioner Cecilia Malmstrom in a statement.
“The EU remains open for discussions with the US, provided these are without preconditions and aim at a fair outcome,” she said.
Recall, Canada is also looking to add wine to its list of tariffs on US goods [see WSD 04-12-2019].
RNDC NAMES NEW VP, SALES. Republic National Distributing Co. has promoted Ivan Gorsky to vp of sales for the Washington, D.C. market, effective April 22. Ivan joined the company in 2014 as vp of marketing for Pernod Ricard. Before that he worked at Pernod Ricard USA, Treasury Wine Estates, Jackson Family Wines, E&J Gallo and Romano Bros Beverage Co.
LLS NAMED EXCLUSIVE IMPORTER OF LINI. Leonardo LoCascio Selections (LLS), a division of Winebow Imports, will now be the exclusive US importer of Lini, a traditional producer of Lambrusco. “We are thrilled to be working with Lini,” says LLS svp and gm Ted Campbell. “Over the years, the preferred style of Lambrusco in the marketplace has evolved from sweet, fizzy reds back to dry, earthy styles that offer tremendous value and complexity. Lini has stayed true to this classic, high quality approach from the very beginning, and is now one of the leaders of the Lambrusco renaissance.”
WE’LL BE BACK IN YOUR INBOX MONDAY. Due to the Easter and Passover holidays, we’re taking a break tomorrow and–barring any breaking news–will resume publication on Monday. Enjoy the long weekend and family time!
“Keep your face always toward the sunshine – and shadows will fall behind you.” – Walt Whitman
——- Sell Day Calendar ———
Today’s Sell Day: 14
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Tues.
This month last year ended on a: Mon.
YTD sell days Over/Under: 0