JC becomes UK’s only 1m case wine over £65th September, 2013 by Patrick Schmitt
Pernod Ricard’s wine brands have posted a 6% organic growth in the 2012/13 financial year with Jacob’s Creek bouncing back to become the UK’s only million case brand with an average price over £6.
According to the group’s full-year sales results, all of its priority wines have posted positive global growth: Jacob’s Creek grew by 4%, Brancott Estate increased by 8% and Campo Viejo was up by 10%.
Furthermore, despite the fluctuating economy in Argentina, Graffigna saw a 13% increase in net sales per litre, and, according to Pernod, “strong results” in Canada and the UK.
Considering the UK market specifically, Denis O’Flynn, managing director for Pernod Ricard UK stressed that the group’s “good performance” in the British market at a breakfast briefing in London this week, attributing growth to sales increases for Spanish wine Campo Viejo, as well as whiskies Chivas Regal and Jameson.
Indeed, he said Campo Viejo “continues to storm ahead,” with 24% value growth and a 16% volume increase (Nielsen, total UK off-trade, MAT to 20.07.13).
He also noted that Jacob’s Creek is “now back in growth” in the UK, up 2% in value in the off-trade over the same period. This means that the Australian wine is now “the only million case brand with an average price over £6 in the market,” he stated.
Meanwhile, O’Flynn said that Brancott Estate had enjoyed a 24% rise in value sales to make it “the biggest selling Sauvignon Blanc in the UK”.
Attributing rising sales to both Pernod’s “premiumisation” strategy and “innovation”, he recorded the positive impact of the Jacob’s Creek Cool Harvest 10.5% abv Pinot Grigio launched on 13 July – a wine with an RRP of £8.56 which has tapped into the demand for both lower alcohol wines and the popularity of Pinot Grigio.
He also mentioned the success of Campo Viejo Garnacha, a varietal Rioja priced at £8.69 which was introduced on 13 August, while, for the future, he said that Pernod would be re-launching Graffigna in the UK as well as bring Brancott Estate Flight – a a 9% abv Sauvignon Blanc – to the market on 13 October.
Considering the global performance of Pernod’s wine portfolio, Jean‐Christophe Coutures, chairman and CEO of the group’s Premium Wine Brands division, recorded sales success outside the UK too.
“In its home market Jacob’s Creek grew in contribution by double digits, whilst simultaneously becoming India’s number one imported wine,” he said, before noting that Brancott Estate has grown both volume and value by 10% in the Americas region.
Speaking more generally about the importance of Pernod’s wine brands to the company, he commented, “The wine business continues to be a strong cash contributor to the Pernod Ricard business.
“During 2013, the cash conversion factor for the wine business was close to 100% (compared to base of contribution) driven by top line growth and stock level optimisation, despite maintained cash investments behind the brands (via A&P and capital expenditure).”
He also noted that Pernod has “continued to rationalise its operational footprint during the year through the completion of several non‐strategic asset disposals”.
These include the Coolabah brand from Australia, the North Island vineyards and Hawke’s Bay winery in New Zealand, and, in Spain, Pernod’s low value table wine business and Valencia bulk winery.
More detail on each of Pernod’s priority wine brands can be found over the following pages.