Pernod prepares for Champagne rebound21st March, 2014 by Patrick Schmitt
A slowdown in Champagne sales in Europe hasn’t dampened Pernod Ricard’s belief in the potential for profitable growth for Mumm and Perrier-Jouët.
During a discussion with the drinks business in late January, Frantz Hotton, marketing director for the pair of Champagne brands at Pernod, said that “the short term situation would have no impact on our long term policy”.
Referring in particular to a 2% decline in volume sales for Mumm (and 1% drop in value) during the last six months of 2013, he said that the brand had suffered slightly because it had avoided heavy discounting to boost its performance in European retailers.
“It’s a question of policy, we did not want to go further in our promotions and defend volumes at any cost,” he told db.
Instead, he said that Pernod Ricard had put greater emphasis on the Mumm rosé, which he said had jumped by 49% in volume sales last year.
He also blamed the slight dip in sales of Mumm overall on the fact “it is a European brand” and consequently dependent on recessionary markets for the majority of its sales, particularly France – Mumm sells almost 50% of its volumes in the troubled domestic market.
On the other hand, he described Perrier-Jouët as “mainly an export brand” with a particular following in the more buoyant Champagne markets of the US and Japan.
As a result, Perrier-Jouët enjoyed a 1% volume increase and 9% rise in value during the last six months of 2013.
Explaining the increase in value sales, Hotton said Pernod had put greater emphasis on the brand’s prestige cuvée.
“We have been active on Belle Epoque, and sales have risen 8% on this globally,” he said, adding, “We are focusing on value.”
Speaking generally about Pernod’s approach to the Champagne business, he said wine and spirits group was planning for future growth.
“We intend to be fairly aggressive in our long term view and use the crisis period to get into some markets and prepare our growth.”
Continuing he said, “These days we are building some sustainable business and expect to expand in emerging markets, so we are in a position to be very dynamic when the global market is rebounding, and we are very confident that it will rebound.”
As for fueling this expansion, Hotton assured db that Pernod would have the supply for future growth.
“As we have done with Cognac, we will manage to get the supplies we need in Champagne, and we are preparing the rebound on the supply side,” he explained.