Pernod Ricard SA (EPA:RI)
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Apr 27, 2026, 5:37 PM CET
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Status Update

Mar 9, 2021

Speaker 1

Thank you for joining me today. In a normal year, I'd be speaking to you in person, perhaps at a beautiful bar in New York City. But as we all know, this has not been a normal year. Last March, my husband and I were hunting for a new home in New York. Today, I'm back in Dallas, where we have been for the past year, working in a makeshift office in our bedroom and learning to adjust to the new normal, like many of you.

We focused on flexibility and agility to manage through the past year as a family, and we've done the same thing as Pernod Ricard North America. Advancing through ambiguity has become the mantra of our North American business. My leadership team and I have relentlessly A year ago, I shared with you 4 challenges we wanted to solve. The things that mattered most to us in the organization, which became the basis of our Transform and Accelerate agenda. Specifically, we needed to become more focused on the consumer to drive our brands, Reduce complexity in how we operate, do a better job prioritizing the areas where our portfolio was advantaged And finally, we needed to increase conversion by connecting media to shelf That met the needs of our consumers and shoppers at the point of purchase and at the point of sit.

So we designed our investments and execution to meet these challenges and saw acceleration for both our Canadian and our U. S. Businesses despite the pandemic, social, economic and political unrest That brought further instability to our businesses and our lives. At the heart of our success lies the power of our portfolio, The incredible resiliency and agility of our employees and our partner distributors and the soundness of our business model. So let's start with a few words on our Canadian performance.

Our Canadian team has done a fantastic job In these very uncertain times, our business performed strongly in the first half with sales up 8%. Our targeted approach on Jameson, the Glenlivet and J. P. Weiser brands resulted in strong double digit growth in retail. Additionally, we made selective investments in spirits fueling the cocktail making at home trend, notably with Malibu and Kalua.

All in all, a very strong performance that showcases the resiliency of our brands and our business model. Now let's turn to the U. S. Market. COVID significantly slowed down the on premise channel, a channel where we over index versus the category.

So to meet this challenge, we adapted our strategies with 2 imperatives in mind, Win in off premise and significantly accelerate e commerce, while of course supporting our on trade partners where possible. We also needed to pivot our portfolio to win across 5 key consumer trends We saw in the emerging marketplace, a return to trusted brands, at home cocktail making, Buying into brands versus just buying them, premiumization and finally, shopping convenience. So let's start with the first trend. Consumers had limited time to spend in store and every dollar mattered. So they were turning to trusted brands.

We responded by increasing media investment and dialing up our innovation. And so we started with our flagship brand, Jameson. We brought the legendary tales of John Jameson back to life. We doubled down on black barrel and focused our innovation on cold brew, one of the top 5 Nielsen 2020 innovations. Let's take a look.

We also doubled down on our 2nd core whiskey brand, the Glen Levitt. Our efforts enabled the brand to support price increases as consumers saw greater value at the point of purchase. Let's see how. The second significant trend we saw was the switch to at home cocktail making. Of course, this impacted all categories positively, But in particular, initiated a resurgence in cordials.

Malibu, our famous Caribbean rum, Benefited greatly from this trend as consumers see it as an easy to mix cocktail that brings the positivity of sunshine into at home consumption. Kalua also saw formidable resurgence as an essential cocktail making brand. We capitalized on the increased desire for coffee inspired drinks Like chocolate martinis, espresso martinis and my favorite, black Russians. We also created innovations to add more variety and convenience to further capture this trend. In 2020, Consumers also continue to look for brands, but not just buy them, but wanting to buy into them, A trend that has only accelerated due both to COVID and the rise of social unrest in America.

Absolute is an iconic brand that has long played the role of cultural provocateur, a brand that sparks important conversations while celebrating the power of inclusion. With household penetration and relevance on the decline pre COVID, We leveraged Absolute's Equity to create a new responsibility platform for the brand, one that ignites conversations on the most relevant

Speaker 2

Absolute has always been a cultural vanguard. But today, driving cultural relevance is more important than ever. With consumers not just buying brands, but buying into them. In 2020, Absolute launched its Responsibility platform

Speaker 1

We've seen strong early response in the brand's performance with Absolute experiencing record levels of consumer engagement. Now let's talk about the next trend that we've seen accelerate, which is premiumization. Premiumization has been a core driver of U. S. Spirits for years and COVID amplified that in home.

We leveraged this trend to really accelerate many of our growth relay brands. Following on our success In premiumizing Jameson with Black Barrel, we focused on 2 of our other high end whiskey brands, Aberlour and Redbreast. We complemented that growth with more outstanding growth across our American Whiskey portfolio comprised of 4 amazing brands: Rabbit Hole, Jeffersons, Smooth Ambler and TX. And our agave portfolio also did very well across Both our tequila brands, Avian and Altos, as well as our Mezcal brand, Del Miguel. These brands switched almost entirely from on to off premise and outgrew their respective markets.

We leveraged Martell's range to take advantage of the increased interest in cognac, which is growing 2 times faster than total spirits. Additionally, given the growth in super premium gin, We doubled down on both Monkey 47 and our newly acquired brand, MALFI. Both saw exceptional response this year. Finally, as consumers look for greater convenience and safety when shopping, e commerce just didn't grow. It with exponential growth week after week.

We acted fast, rapidly expanding the capabilities of our e commerce team. And based on Nielsen reporting in our fiscal year to date, we're actually outperforming the market. A few short years ago, many would have never thought it possible to have their favorite spirits brands delivered to their door. Now it's We delivered a strong performance in the first half growing net sales in the United States by 5%, closing the gap in off premise, Growing with the market in on premise and developing a strong emerging e commerce channel. Now let's talk about how we are transforming to Accelerate our future growth.

I'm very proud that Pernod Ricard North America was able to rise to the challenges presented by this turbulent environment. We transformed with speed and agility. We adapted to the new normal in real time and we continue to deliver. But we don't see this new way of working as just temporary or an exception. We live and will continue to live in a VUCA world.

Together with my leadership team, we are laser focused on taking every learning from this past year and making our new way the everyday way for how we operate. In this context, advancing through ambiguity remains at the heart of our transformation agenda As we continuously design and operate systems that allow us to make decisions at this new speed of business. Our transformation continues with the focus on 4 critical elements. 1st, building a world class team Higher operating system for the business. 3rd, digitizing our ways such that we can democratize these tools and analytics, so our teams can drive growth in a predictable manner.

And then finally, continuing to implement a holistic e commerce capability That is not only B2C, but also B2B with our distributor partners. Businesses are driven by their people. And to accelerate, we need to unleash the potential of our people by enabling them with advantaged capabilities. Over this past year, I've worked very diligently to build a world class leadership team to develop those capabilities and best practices, not only for our business, but for the industry. We have brought together an extremely talented group of Proneau Ricard and industry veterans, Along with newly hired executives from leading FMCG and tech companies as well as startups.

By focusing on building teams with diverse backgrounds, we've instilled the expertise needed to take us to the next level, Propelling Pernod Ricard North America forward to market beating results. While these are still early days And we are still laying the foundation. We are understanding predictive consumer behavior like never before and monitoring it in real time. This proven approach converts insights into action By using predictive science and advanced analytics to understand what the shape of demand looks like And how our consumers make choices. Through rigorous analysis, we have gained extensive insights into the U.

S. Marketplace And where our brands have a right to win and gain share. This is about unlocking our brands across the entire path to purchase, which informs how we need to design our business operating system to enable our portfolio of brands to grow. We've already aligned each of our brands against what we call moments of conviviality. This is where our brands will be well positioned to win.

We're now enhancing this approach Through sophisticated analytics aligned with our brands in those moments, this involves building understanding in each Individual moment of conviviality determine what attributes matter for consumption and what triggers purchase. For example, tactics to trigger a sale for a moment of conviviality, that's about relaxation, We'll differ considerably from a moment where a consumer may be looking to make an impression. We need to know and respond to each of these moments with precision and with our advanced tools and analytics that is precisely what we are doing. Operationalizing and democratizing these advanced analytics will be imperative if our teams Our to deliver results in a predictable manner. So we are digitizing our ways of working, creating tools to seamlessly connect media to Shelf, through advanced marketing mix analytics, predictive price and promotions optimization tools And an outlet based segmentation that is powered by granular demand analytics And align supply with demand at an outlet level.

Finally, I mentioned e commerce earlier. I'm extremely bullish about how it's going to continue to transform the beverage and alcohol industry. And I'm excited about the role that Pernod Ricard can play in accelerating this transformation with our customers and for our consumers across the country. We are not only seeing an explosion in this space With Uber, for instance, purchasing a pure play provider like Drizly, we are also seeing our distributors create B2B capability for selling our brands to retailers. Therefore, our ability to team up early with our partners on our granular demand analytics will be key to drive advantage.

While beating the market and gaining market share will Gaining share of the future is what really drives us. And to do so, We cannot just focus on return on investment or ROI, but we also have to work to maximize what we've termed ROR or return on responsibility. This is about winning the future by creating shared successes for all our stakeholders, An ambition that guides our transformation every step of the way. At the corporate level, we are looking to deliver ROR in multiple ways. This year, shortly after the pandemic hit, we became the 1st major spirits maker in the U.

S. To adjust our manufacturing facilities to produce hand sanitizers in the wake of the COVID outbreak. We have donated more than 250,000 bottles and almost 4,500 drums to frontline and essential workers. Our first delivery date was March 27, only 8 days after the first Official stay at home order was issued in the U. S.

Now beyond COVID, we've been confronted with other realities, Like the structural racism on a national scale, we responded by donating to multiple third party groups to combat racial injustice and promote economic prosperity for black owned businesses. At the same time, We renewed our commitments to diversity, equity and inclusion, embarking on a journey to become the most inclusive, Diverse and sustainable spirits and wine company in the U. S. For us, return on responsibility also means that our brands meet the highest standards of responsible advertising. It makes doing the right thing the most immediate, Urgent priority in service of our consumers and communities.

Over the past months, fueled by online hate speech, We have seen our social environment become toxic and unsafe, a situation driven by the few that make it harmful for the many. As I was thinking about what role we could play in creating change, it was our Global Chairman, Alex Ricard, who pointed out that one of the many cruel ironies of 2020 is that the term social distancing It was coined on a global scale. We should have called it physical distancing. The need for social proximity has never been greater. And social media was made for this moment.

That's why we called on the advertising industry to help stop the spread of hate speech online Open source, globally scalable solution in the fight against online hate speech. Pernod Ricard provided the seed, investing in open solutions and technology for the Association of National Advertisers to operationalize and mobilize with the industry and social media platforms under the GARM Global Framework. We believe that human social connections are critical to our planet's sustainability and for our future. Together, we will be a force for change to fight online hate and lead the way in the next evolution of social sustainability, protecting social spaces and a just society. Finally, I would be remiss not to acknowledge the acute pain of our colleagues Working in bars, restaurants and the broader hospitality industry and what they have felt This past year, they have shown incredible ingenuity and resourcefulness in managing through the pandemic.

This community, it's the backbone of our industry and one that we and our industry partners Are proud to have supported during COVID and we will continue to do more. Because no matter what the new normal looks like, On premise, we'll be back. How can we know for sure? Well, if this pandemic has taught us one thing, it is that humans are resilient. We are fueled by our need to connect and bond with others and that need cannot be deterred by a virus.

For many of us, bars and restaurants are where we meet with friends, celebrate with family or our colleagues and enjoy moments of true human connection, whether it's over a glass of wine, a great cocktail for a bottle of champagne. At Pernod Ricard, we call these moments of connection conviviality. When I joined the group 16 months ago, that was a word I had heard, but most certainly did not understand. Today, I know that the notion of conviviality guides everything we do at Praneau Ricard. It's our secret weapon because our purpose is to do more than sell spirits.

It's to bring people together in meaningful, Positive and responsible ways to unlock the magic of human connection. And who couldn't use a little more of that in their lives right now? Thank you. And I so look forward to taking your questions.

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