Ladies and gentlemen, thank you for standing by, and welcome to the Pernod Ricard EMEA LATAM conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone keypad. I must advise you that this call is being recorded today, on Tuesday the 1st of December, 2020. I would now like to hand the call over to your host today, Julia Massies, Vice President, Financial Communications and Investor Relations. Please go ahead.
Good afternoon or good morning, ladies and gentlemen, depending on where you're calling from. Thank you very much for joining us for today's presentation on our EMEA LATAM business. We are hosted this afternoon by Gilles Bogaert, our Chairman and CEO for the region. Gilles will take you through a brief presentation and then leave some time for your questions. Gilles, over to you.
Thank you, Julia. Good afternoon, everybody. Very happy to be here with you, remotely for our annual update on EMEA LATAM performance and key initiatives. Let's start with a few key figures for EMEA LATAM. 5,513 people, 57 market co-affiliates regrouped in 11 management entities, 22 production sites. The region represents 28% of the group's sales. 63% of the net sales of the region come from the strategic international brands. We had, in the last employee satisfaction survey, I say 2019, a high engagement rate of 90%. As you can see, it's a large region. Western Europe, it's five management entities. Central and Eastern Europe, two management entities. Together, they represent Europe. As compared to group financial communication, the difference is that you don't have France here, and you don't have Ireland and travel retail. LATAM, two management entities.
In the group's financial communication, it's included in the Americas. Africa, Middle East, two management entities. In the group communication, it's included in Asia, rest of the world. A summary of our strategic battlegrounds, as you know, we continue to drive our Transform & Accelerate the roadmaps. Our long-term battlegrounds of our last strategic plan remain totally valid, even post-COVID-19. We want to gain share in LATAM and Africa, Middle East, leveraging our whiskey portfolio, Absolut, and also in SSA, our mainstream whiskeys. In Central and Eastern Europe, we want to consolidate our leadership, in particular through the whiskey portfolio. In Western Europe, we want to grow Jameson and Absolut and leverage the gin and aperitif opportunity. Obviously, everywhere, almost, we want to fast track the buoyant gin and tequila categories. You can see the fantastic gin portfolio we now have.
We want to drive innovation as a key top-line driver to leverage our prestige portfolio. We want to keep managing actively our portfolio. Three brands recently joined the portfolio for the region, Italicus, KI NO BI, the gin, Japanese gin, and the Spanish vermouth, St. Petroni. To do that, we have key enablers that allow to deliver that ambition. Marketing transformation. We want to be more consumer-centric. We have refocused our market companies on best-in-class marketing execution. We are creating a regional innovation hub and also a regional digital center of excellence. We want to keep accelerating in digital, in all areas. In the commercial area first, with development of a data-driven approach for our sales force. Accelerate our development in the fast-growing channel, e-commerce. Keep enhancing our capabilities in revenue growth and promotional effectiveness.
Last but not least, we want to keep digitalizing our back office and our S&OP. In terms of organization, we want to have a fit-for-purpose organization. Many initiatives on that front. UNITE! within the IT area. We now have this operational with four IT business solution hubs and two IT centers of excellence, one for front office, one for back office. Our organizations all over the world have been evolving also to adapt to the new business environment and to the evolution of our priorities. We kept also transforming our management entities, leveraging more expertise, efficiencies between the lead market and the smaller markets, and also developing mutualization. Obviously, we have also started to implement our 2030 sustainability and responsibility roadmap in the region. A lot of transformation. That's the case also in the way we manage our talents.
We actively manage our talent pool to deliver our ambition. Here you have the illustration of what happened in the management teams since March 2020, with new CEOs for Northern Europe, Southern Europe, and Sub-Saharan Africa, and also close to 10 new MDs in our market cos. In terms of results, fiscal 2020 has really shown till COVID-19 the business acceleration, and since then, a strong resilience. In fiscal 2021 and Q1, we have an encouraging start of the year, even if the context remains challenging and heterogeneous. You can see here the sequence of key figures. Organic sales in fiscal 2020, we were down 5% due to the last quarter strongly hit by COVID. In the first half, we were up 5%. In Q1 fiscal 2021, we are down 2%, that's an encouraging start.
As we know that in summer, the sanitary conditions were easing, and we benefited also from the staycation phenomenon in Europe. From an operating profit standpoint for fiscal 2020, we posted within the EMEA/LATAM a modest growth despite the 5% decline on the sales, thanks to a strong and reactive resources management after the COVID-19 started, in particular on A&P and structural cost. This led in fiscal 2020 to a very strong operating leverage that reflects the significant adjustments we've done on resources. Good figures and also good performance in terms of market share. We gained market share in most of our key markets. We were doing so before COVID-19 started. We kept doing it after COVID-19 happened. You have here the main trends for MAT. As you can see, many categories and countries are in the green area.
We gain share in Spain, in the on-trade channel and in the off-trade channel, despite very tough market conditions. In Germany, we gained 90 basis points of market share, very strong performance there. In Italy, we lost in whiskey, we gained in vodka. Very strong performance also, as for Germany, in the U.K., and in Sweden. In Central and Eastern Europe, we were flat in Russia in the last 12 months, we gained it in Q1 this year. We gain share in our key strategic battleground in Poland, the whiskey category. In Africa, Middle East, we lost share in South Africa. We were stable in whiskey, down in vodka. We consolidated our strong leadership in imported spirits in Turkey. In the LATAM area, we gain share in Mexico on premium plus imported spirits.
In Brazil, we lost share in whiskey, but we gain share in the clear spirits, vodka, and premium plus gin. Good financial performance and also a good market share evolution on most categories and most markets. Let's have a look at our strategic priorities, starting with our sustainability and responsibility strategy. You know well our group strategy and the commitments and the ambition for 2030. The region is totally aligned with what is done at the group level, with many initiatives in nurturing terroir, in valuing people, in circular making and responsible hosting, and with, obviously, the COVID context even reinforcing, I would say, our initiative. You have here a few examples of what we do.
On the following slide, a zoom on some initiatives since COVID-19 started, in particular to support our bartenders partners and bartender community, and also in responsible hosting, a zoom on our key group initiative, Responsible Party, that was done virtually this year. Good vibes in tough times. Let's have a look at the category by category, I would say, performance and initiatives, starting with our number one battleground in the region, the whiskey battle. The portfolio was very resilient across all geographies. We were down 4% last fiscal year. The whiskey portfolio was up 2% in Q1. You have here the performance on our key brand, Ballantine's, Jameson, Chivas Regal, and The Glenlivet. As you can see on Ballantine's, we've had a very good performance in most of our key markets, Russia, Brazil, Turkey, and Poland.
Poland, which is not far from reaching the threshold of one million cases. We have strongly grown on the brand also in Mexico. The brand had been suffering more in South Africa, this year with the alcoholic bans, the two bans that we had to face, and also in Spain because of the strong exposure of the market to the on-trade. We believe that we have a strong new platform, good innovation pipeline and we expect, I would say, to improve that going forward in Spain. Jameson, that the strongest growth engine in the region. As you can see, many markets doing very well with a double-digit growth in countries like Germany, the U.K., Northern Europe, for instance, Nigeria. In Russia, it was very resilient last year. Q1 starts slower, we are confident that things should improve going forward.
In South Africa, the performance of the brand was negatively impacted by the alcohol ban. Chivas, we can see a good momentum in Germany, in Poland, in Turkey. Turkey is the second largest market worldwide for Chivas Regal 12, and an acceleration in LATAM, in Mexico and Brazil. Another notice, The Glenlivet. It's doing very well, and Q1 shows a double-digit growth. The whole malt portfolio, by the way, is doing well, The Glenlivet, but other brands like Aberlour also, our specialty malts. In many markets, that's the case, in particular in Europe. Let's have a look now at the gin portfolio. As you know, we've been expanding and leveraging our diversified gin portfolio to see the category boom. Last year, excluding Spain, our net sales in gin in the LATAM were up 2%. In Q1, still excluding Spain, it was up double digits.
We have a lot of initiatives, innovations, new brands joining the portfolio, new campaigns like The Spirit of London digital campaign. Obviously, very happy to have the partnership on our Japanese gin, KI NO BI. We keep developing Monkey 47. Inverroche is doing very well in South Africa, and it has the potential to grow, in particular in SSA. One of the last big brands that joined the portfolio, Malfy Gin, has a very strong start, and it's one of the top three growth drivers in Q1 for the region. Aperitif is another very attractive category for us, and we reinforce our ambition in that segment, which is very important for us, with a growth of 41% last year and 40% in Q1.
Obviously, we have one brand driving that performance, which is Lillet, which is very strong in Germany, in particular, and starting to grow in many other countries, in particular in Europe. We also have Italicus, our Rosolio di Bergamotto from the Amalfi Coast in the portfolio. The last brand that joined the LATAM portfolio, the Spanish vermouth from Galicia, St. Petroni, that we're very happy to have in the portfolio. That's close to 20,000 cases. It's a premium brand, and it has been growing even post-Covid-19. Innovation is another key growth driver for us in the region. It's playing a key role, and it allowed us to be quite resilient at the top-line level, both in fiscal 2020 and in the first quarter. It delivered last fiscal year an incremental top-line growth of 1% on the top of the overall regional top-line growth, and in Q1, 2%.
You have here an illustration of the different initiatives, different innovations on Beefeater with different flavors, pink, blood orange, and blackberry. Also on some other brands, like the launch of Amaro Averna in Germany, the launch of Ballantine's, the seven-years-old bourbon finish, in particular in Poland. The Chivas Regal 13 Tequila Cask Finish that we launched in Mexico. More to come in H2. Let's have a look now at the performance of the key markets, starting with the Western Europe area. We keep having a strong dynamism in Germany and U.K. when Spain remains tough. As you know, Spain is a lot exposed to on-trade. It's more than half of the domestic market. We suffered, obviously, because of limited on-trade opening in the last months. We gain share both in off and on-trade in that tough environment.
In terms of highlights, obviously, the acquisition of St. Petroni, and I think it's important to add new growth drivers to the portfolio. We also integrated in our portfolio the wines that were distributed before by a different Pernod Ricard wine entity. The two commercial organizations were merged last year. We also now have in the portfolio 100 Pipers that used to be distributed by a third-party player, and it will allow us to strengthen our whiskey portfolio strategy there. Germany and the U.K. have been very strong in the last 12 months. Strong momentum before Covid-19, strong momentum after Covid-19 started, both from a top-line tempo and also from a market share gains. On-trade in both markets only represents close to 10% of net sales, so it's strong off-trade exposure. The off-trade have been quite resilient, and home consumption have been quite resilient.
On the top of it, we have a strong momentum thanks to our popular strategy and our different brand initiatives. You have here a few example. The new campaign on Absolut, it's in Our Spirit, that was launched a few weeks ago in both the U.K. and Germany. Very promising campaign to celebrate the importance of meaningful connections. That's something we do with four stars of virtual reality. Malfy, that has been launched in both markets and which is growing very fast. Lillet, obviously, which is a key growth driver for Germany. It's the number one contributor to growth. Also Ramazzotti has had a very good start in fiscal 2021, helped by the launch of an innovation, Ramazzotti Crema which allow us to see new occasions of consumption. You also have the launch of The Glenlivet Caribbean Reserve in the U.K.
The U.K. had also very good performance of Jameson and of the wine portfolio that has been growing double digit in the U.K. Eastern and Central Europe, very resilient activity there, mainly driven by the whiskeys. We were up last year 2% in both geographies and in Q1 down 2%. In Russia, our market share was flat last year after some drop in Q4. In Q1 we are back to market share gains, thanks to some increased investment behind, in particular, our whiskey portfolio, Jameson, Ballantine's and Chivas Regal. We start to leverage other growth drivers, in particular, the gin category with Beefeater. In Poland, we had a very good performance last year, and that's also the case in Q1, thanks to the whole whiskey portfolio, obviously Ballantine's our number one brand there, but also Chivas Regal and the Glenlivet, and also Jameson, which is growing very fast.
As for Russia, we also activate new growth relays like the Beefeater. Africa, Middle East, we continue to have a very strong growth in Turkey. It was the case last fiscal year, despite COVID-19, despite the economic crisis there. It's still the case in Q1. We reinforce our leadership there, which is driven by our whiskey portfolio, in particular Chivas, and also a growing role of Ballantine's in the portfolio strategy. We delivered that despite the collapse of international tourism and despite the economic crisis, and showing the resilience and the loyalty also of our consumer base. In SSA, the context was very tough. After COVID-19 started, we had to face two successive alcohol bans, not only in on-trade but also in off-trade. The last one was one month, from mid-July to mid-August. Since then, things are starting to get better. The sanitary environment is improving.
The whole region, we start to have some recovery. Many initiatives there on Jameson, on Martell in Nigeria, and also some marketplace and e-commerce initiatives through our partnership with Jumia. LATAM, last year was tough there because of COVID-19. Q1 is showing some rebound in our two key markets, Mexico and Brazil. Whereas the smaller markets are still negatively impacted in Q1, in particular because of their indirect route to market that leads to some destocking that is still going on. In Mexico, we've had an improved momentum as compared to the market trend with Pernod Ricard Mexico in the last eight months, and we gain share in particular on the whiskey portfolio. You have here a few examples of different initiatives. We've been also very active on digital and on seizing the e-commerce opportunities there. In Brazil, we have a rebound in Q1.
It's mainly driven by local brands that benefit from some measures to help local consumption. Brazil has been very smart in seizing also a new post-COVID opportunities, in particular leveraging the virtual conviviality with The Cloud Bar and also being a partner to the local master chef of drinks, which is called Bar Aberto. As a conclusion, in fiscal 2020, we had this resilient performance, and it's confirmed by an encouraging Q1. As you saw, we have the solid market share gains in most markets and most key categories. We benefited in Q1. With sanitary condition easing during summer and also the staycation phenomenon. In Europe, we had a good off-trade resilience, but on-trade is still severely down in Q1.
The current context is still difficult and very heterogeneous, both from a market standpoint and also from a brand standpoint. We expect the Q2 to be negatively impacted in Europe by the new on-trade restrictions due to COVID-19 second wave sanitary measures, most of them starting in November. We have a clear strategic roadmap. Our Transform & Accelerate roadmap is still valid, even if we added a few injections in terms of the channel strategy or to adapt to new expectations from consumers. We plan to continue to win the whiskey battle. Innovation, gin, and aperitif remain our main growth relays. We want to keep to have an active portfolio management, to continue to adapt our organization to the new environment, and last but not least, to keep having an active talent management with diversity and inclusion at the heart of it.
We believe we, at Pernod Ricard EMEA LATAM, are well positioned to see the growth opportunities going forward in key markets while we still manage resources in an agile way.
Thank you very much, Gilles. We'll now take your questions, please.
Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel that request, please press the hash key. Once again, that's star one to ask a question. Your first question comes from the line of Edward Mundy at Jefferies. Please go ahead. Your line is open.
Afternoon, Gilles. Afternoon, Julia. Three from me. The first is, looking through the crisis, what do you think is a reasonable growth algorithm for Europe? Do you think low single-digit revenue growth is a reasonable place to be for this division?
Sorry to jump in. The line wasn't clear. Did you say what is a reasonable growth algorithm? Is that what you were saying?
Yeah. What is a reasonable growth algorithm for Europe once through the pandemic on a medium-term view? The second question is, despite the volatility from COVID, you've gained market share in most of your key markets. What do you think are the two or three most impactful things that you're doing today that you weren't doing a few years ago that's helped your share performance? The third question is on the fit for purpose organization. I think the Transform & Accelerate program was explicitly around margin expansion between fiscal 2019 and 2021. Can you talk about the longevity of this program? Is it going to run much beyond 2021? What are your aspirations from a margin standpoint?
Yeah. Thank you for your questions. I think your first question was on the growth algorithm. I think that in the presentation, we highlighted the growth that we had last year. For the full year, we were down 5%. In the first half, we were up 5%. Let's say the last underlying top-line trend that we had pre-COVID was mid-single digits top-line growth. Obviously, the COVID had a strong negative impact in Q4 and in H2. We still have that impact, obviously, this year, in particular in H1. Let's say that probably the performance we had in H1 2020 is a good proxy of the underlying trend we had pre-COVID. It's hard to assess underlying trend during COVID, knowing that we have some markets which are growing at a good pace, some others which are severely down. It's very heterogeneous.
That's, I would say, the best summary I can do of the current situation. In terms of market share, yes, I think we gained share in many markets. I think it didn't come by chance. It's a consequence of everything we've done in the last few years on all topics, on portfolio strategy. I think that we have rightly activated new growth relays at the right time, which are now delivering, the case of what we do in innovation. We have clearly speeded up our pace of innovation. We have also seized ahead of time the new consumer trends and in fast-growing categories. That's the case in gin, and M&A has been a part of it, and to seize that opportunity. That's the case of Lillet, the aperitif wine that is having a very strong performance today.
This is something that we started to do in Germany six or seven years ago. That portfolio strategy, the fact that we are locating the resources at the right time behind the right opportunities, is clearly paying off today. I think also that the very good work that we've done on our key brands in terms of brand platforms and in terms of execution and (last quarter execution) has also paid off. For instance, on the brand like Jameson, in most markets, now the brand is having a very good momentum, not only in its strong historical markets like SSA or Russia, but also it's growing very fast in Western Europe, U.K., Germany, and also in Poland. I would like also to highlight the role of Ballantine's in the whiskey battleground. Ballantine's is growing very fast in our emerging markets, in LATAM, in Poland, in Eastern Europe, in Turkey.
It's also something that we started to accelerate six or seven years ago. These are a few examples of what we've done. I would also like to add our execution capabilities, the evolution of the organizations. I think the right strategy, with the stronger expertise, strong teams, strong ways of working and execution, I think allows to deliver that good market share performance. In terms of Transform & Accelerate program, this plan was shaped three years ago. When you launch a new approach, a new strategy, it delivers results over the following years. We start, obviously, to get results from that. I think that many battlegrounds of that plan are still valid today, in particular the digital acceleration.
We started, obviously, to accelerate there, but there is still a lot to do to become a true data-driven company in the commercial area, in marketing part, to help us to make the right resource allocation to help our salespeople to improve further their execution. Here, I expect that the benefit of that digital transformation will still be seen in the years to come.
Thanks, Gilles. Just on the fit for purpose organization piece, can you talk a little bit more broadly about where you are on that journey and whether that sort of come to an end in fiscal 2021, or will that run sort of beyond that period as well?
An agile organization needs to reinvent itself permanently. That said, I think that a lot has been done in the last two years. We now have an IT organization which is far more globalized, and it's now effective. We have leveraged our management entity all over the world to have stronger sharing of expertise, common teams for things like consumer insights or digital studios, some synergies in back office for finance, for supply chain between those markets. I think that a large part of what we plan to do has been done last year and is being done now. Most of the transformation and evolution of our organizations has been done in the last two years.
Great. Thank you.
Your next question comes from the line of Trevor Stirling at Bernstein. Please go ahead.
Hi, Gilles and Julia. Thank you very much for the presentation. Three questions from my side as well, please. First one, Gilles, I'm intrigued, as part of Transform & Accelerate program, becoming more consumer-centric is part of the program. In what way was the organization not consumer-centric before? How do you think the organization is actually changing? A little bit more granularity there would be very helpful. Same thing, I think you mentioned that Malfy was the number three contributor to growth in the region. I'm just wondering what the other two were. The third question, as part of fit for purpose, I presume this involves a lot more standardization of ERP systems. As Pernod Ricard, do you now have a global ERP system or is it regional systems?
Thank you for your questions. On consumer centricity, I wouldn't say that we were not consumer centric. We want to be more consumer centric, and in particular leveraging data, as I said before, and starting with consumer data. For instance, we created one year ago a global consumer insight organization, which allows us to have a better understanding of new consumer trends to be able to make the, I would say, the right business decisions. This is a move that we've done. We decided to create a regional innovation hub, which will allow to be closer to consumers, identifying the new trends, starting with the markets, and then work together with the brand companies on the innovation pipeline. Here, the starting point will be to see the new trend that we have in the market.
Our new S&R strategy is also starting with the consumer. From buying a brand to buying into a brand, that definitely something that we do more and more in developing our brand strategies and brand campaign. That's what we mean to be more consumer-centric. In terms of growth drivers for the region, you're right, I mentioned Malfy in the top three since the beginning of the year. Lillet and Jameson are the two other leading brands. Malfy and Lillet were not in the portfolio 10 years ago, which shows the importance of betting behind the right growth relays at the right time. In terms of fit-for-purpose organization and evolution of IT and so on, it's not just a matter of ERPs. I think we tend to have a jumble with ERPs in most countries. We don't have necessarily the same core model everywhere.
With the new IT organization that we have, whenever we deploy a new IT solution, whether it is a SFA One or any other, I would say, apps that we want to deploy in our market cos, we now do it in an industrial way, at the regional level or at the group level. Which allows to have far more commonalities and to be quicker in deploying, I would say, new apps which are adapted to the new needs. Today with the new technologies, with the API technical solutions, now you can link apps between each other, even if you have a history of different ERPs. I think that's something that today we can manage very efficiently and, more importantly, we have today an IT organization which is organized in a way that it can be a very efficient enabler for the group transformation going forward.
Super. Thank you very much, Gilles.
Your next question comes from the line of Sanjeet Aujla at Credit Suisse. Please go ahead.
Hi, Gilles. Three questions from me also, please. Firstly, on wine. Would you say the wine portfolio is strategically more important than in the past for the organization in a post-COVID world? Secondly, can you just talk a little bit more about e-commerce? What sort of acceleration have you seen there? How significant is e-commerce now in recent months for your business in Western Europe versus the year before? Just coming back to stock levels. Can you just comment on stock levels, particularly across your emerging markets? You spoke a little bit about LATAM seeing some de-stocking, maybe a little bit in Russia as well, but I'd love to get a sense of what depletions are doing versus stock levels in those markets. Thank you.
Well, on wine, I don't know if it's more important. I know it's doing better and that's what matters at the end of the day. It's doing better because I think that in the last two years, we've done in the group, very good work in improving the performance in adjusting the organization to be more efficient, to be quicker at innovating, to have a more fluid relationship between the brand company and the market codes. This very good work, I think, is paying off today. It's fair to say that in the COVID-19 times, in some countries, wine has been particularly resilient also, and that was in particular the case in the U.K. I think it's a combination of a good portfolio strategy and an improved execution in wine, as much as COVID-19 trends favoring trend. I think I had the same question last year.
Wine, I think is quite a good complement to Our Spirit portfolio, in particular in some management entities like the U.K., Northern Europe, and also Spain, where we enjoy a good Spanish wine portfolio. E-commerce, that's definitely a channel on which we have accelerated a lot, partly because this channel was boosted by the COVID-19 context, but also because I think we've done the right things in terms of ways of working, in terms of elevating our skills, and investing more in that channel with different drivers. The e-retail, the big marketplaces, the on-demand with some agreements with companies like Glovo or Rappi. In Africa, as you know, we have a partnership with Jumia, and we also have our own marketplace, Drinks&Co, that has become more important after the successive acquisitions of Uvinum and Bodeboca.
We have a large diversified e-commerce ecosystem, and it's delivering because I think on average, our sales have been multiplied by two in the last 12 months. It's not across the board because some countries are more advanced than others in the region. Very clearly, U.K., Germany, South LATAM are the most promising countries for us in terms of e-commerce. We are also accelerating a lot in North LATAM and also in Nigeria, even if the share of e-commerce in Nigeria and in Italy, in Southern Europe is a bit lower. It's still little developed in Eastern Europe. By the way, e-commerce is not legal in Russia for spirits and in the Middle East. U.K., Germany, LATAM and Africa are definitely areas where we are accelerating, and we believe that we gained share in e-commerce in the last 12 months in most of the geographies.
In terms of stock levels, to make it short and simple, I believe that today they are probably at normal levels. Let's say that the level of inventories has been different from one market to another one, depending on the structure of the market, whether the route to market is direct or indirect, and also of the timing of the peak of the pandemic. That's why because LATAM has been impacted a bit later than others. This is the region where we still have some destocking in Q1, in particular in smaller markets, where we work with third-party distributors that have not ordered a lot since the beginning of the year. Things are getting more normalized now.
Thank you.
Your next question comes from the line of Olivier Nicolai at Goldman Sachs. Please go ahead. Your line is open.
Bonjour Gilles, Julia. I got three question, if I may. First on Spain, obviously you said it's a big on-trade market. I was just wondering if you had any idea of what you think about the pace of recovery over the next few years, and you think the on-trade channel would be permanently weaker, going forward in Spain. Second question is regarding cognac for the region, and obviously your region is very wide. I was just wondering if perhaps could give us a bit of what your view is on cognac potential in Africa, Middle East and perhaps as well in Europe for the Martell brand. Just lastly, it's more actually a question on your slide 19 regarding Turkey, since you mentioned that organic sales growth was strong.
I was just wondering if it's just purely pricing to offset inflation or is there any volumes growth as well there? Thank you.
Thank you. Bonjour. Your first question was on Spain. I think you're right to say that it's a large on-trade market and more than half of the domestic market is on-trade, but also a market where the border business is important and is also impacted by the ability of people to travel. The on-trade today is still suffering a lot because there are many on-trade constraints. It's not totally closed. It's a different situation province by province. It's closed in some provinces, it's open in others, but very often with some very strict timing, and number of seats restrictions. Looking at Spain, the last big crisis was in 2008, 2009, and at that time, the on-trade was very severely hit. Many outlets closed and were not reopened. Other outlets reopened afterwards. The consumption came back. It's really part of the culture there.
It's part of people in Spain, they tend to go out with friends and with families to the restaurants. They don't have the habit to host at home. Now, that's something that could evolve potentially with the current crisis, but we definitely believe that on-trade is really a strong part of the Spanish culture. There was a clear improvement in July, August during the summer, a fast improvement. It's unfortunately got worse after that because the COVID-19 second wave started to hit again. We are confident that when the pandemic starts to be behind us, this channel should grow again. Again, maybe with some on-trade outlets, new ones that could reopen. Mainly also with some stronger day consumption as opposed to night consumption, because it's true that the night clubs have been a lot impacted by the current crisis.
We have started to see ahead of the COVID-19 crisis, a gradual shift towards more day consumption. That's something that we have anticipated with our portfolio strategy. I think the acquisition of St. Petroni Vermouth Aperitif, is totally in that line. The innovation that you are going to see on the Spanish market are also going in that direction. It could take time, but when the pandemic is behind us, I think it could just accelerate within a few months. In terms of cognac, it's fair to say that the EMEA/LATAM is not the largest region for Martell. It's more about Chinese, Asia, travel retail, and the U.S. Nevertheless, we have a few markets which are very attractive in terms of size and growth potential for Martell and for cognac. The first one being Nigeria. Martell is growing very fast there.
It's a 200 million inhabitant country, whose population is growing very quickly, very influenced by the U.S., and that's definitely a very promising market there. We invest clearly behind Martell to aggressively grow the brand there. We are the market leaders in Mexico, and that's another market which is attractive to us. Obviously, all Central America and the Caribbean, with the importance of U.S. tourism, even if it's a bit less strong at the time being, it is very definitely also a growth potential as part of the prestige portfolio. I would also like to add Russia. There is a strong brandy consumption habit there and Martell has the potential to grow there. The U.K. and Northern Europe are also attractive markets. Here we are obviously very careful about the pricing strategy there.
Turkey has had a great performance in the last three months and in the last 12 months also. Very resilient. Despite the collapse of tourism, despite the subdued on-trade, thanks to a very strong resilience of the traditional off-trade business. And this growth is coming both from volumes growth and pricing. It's really a combination of the two. It's fair to say that in Turkey, we partly benefited from some transfers from travel retail, because the travel retail being almost new there. There was some of the volumes which were recaptured back on the domestic market. We happen to have a very loyal and resilient consumer base in Turkey, and we speak about maybe four, five million people with high acquisitive power, who can keep consuming despite the local currency devaluation. And that's something we've seen clearly in the last 18 months.
Very strong growth there, coming from pricing, but also very clearly from volume growth and market share gains.
Merci beaucoup, Gilles, for your response.
We'll take the question from our final caller, please.
Sure. The final question comes from the line of Simon Hales at Citigroup. Please go ahead.
Thanks, Julia. Just a couple of quick ones from me, please. I wonder, could you talk a little bit more about maybe the tequila portfolio? How that's been developing, how the mezcal and the tequila portfolio has been rolled out, the opportunities you perhaps see across your geographies. Maybe linked to that, what are you seeing in terms of agave prices at the moment, anything you can say about how they are starting to trend? Then secondly, I know obviously you've been doing a very good job in terms of the market share gains we've seen across a number of your regions and countries for a while.
How much do you think over the last 6- 12 months, on the back of the COVID pandemic, how much from the share gains that you've seen do you think have come from the independents, the craft sector, and big brands just resonating more with consumers? Do you think that's driven a step up in your share growth or is it something else?
Sorry, Simon, this is Julia. The line wasn't great. Can I just rephrase? The second question you were asking the share gains, how much came from the craft or smaller brands than big brands winning? Was that the question?
Yeah, it was just to get a feel, Julia, for obviously you're probably gaining share from your big competitors, but also craft and smaller independents have been under pressure under COVID. Has that also been a bigger contributor to some of the share gain of late? I suppose the underlying question is how much of the recent share gains do you think you can really hang on to post the pandemic?
Okay. Thank you, Simon, for your question. The first one on the tequila and mezcal portfolio. I think it's more a question on the brand company that we call House of Tequila, which you're right, is part of the EMEA LATAM. Even if the by far number one market is the U.S., obviously. Our tequila portfolio has been doing very well in the last 12 months, even post pandemics, with strong growth on brands like Avión, on Altos, and also at the higher end of Avión Reserva 44, and of our mezcal brand, Del Maguey. There is clearly a very strong demand there in the U.S.
We've been able to seal that growth, putting in place the right portfolio strategy with Avión Reserva 44 being the prestige brand, Avión the super premium one, and Altos being the premium one, the last brand being Olmeca Tequila, which is mainly sold in Europe, in particular in Russia or Turkey, and very exposed to the night channel. Olmeca Tequila has suffered because of that exposure. The three other brands that are very exposed to the U.S. have had a very good performance, following the trend that we see on the category in the U.S. That's definitely a strategic priority for us. Obviously, we expect in the years to come, the profitability to improve, not only through strong pricing, but also through normalization of the cost of agave. We've been waiting for that for many years.
We today believe that the price of agave should probably plateau in the next couple of years before going down, plateauing around MXN 30, MXN 32 a kilo. It's fair to say that the strong resilience of the tequila category in the last 12 months is probably delaying a little bit the decrease of the price of agave. We are confident that midterm, it should clearly happen. Your second question on the share gain. I think in reality, it's coming from a large spectrum of brands, both premium blockbuster brands that very clearly have been quite resilient during that crisis. I think consumers look for safe also choices, and brands like Jameson, Ballantine's, Chivas, Absolut in Europe have been particularly resilient. We also have some specialty brands that have had a very strong performance.
Our specialty brand in LATAM have grown at a quicker pace than the rest of the portfolio, driven by brands like Lillet, Malfy. Also our specialty malt brands. The Glenlivet is doing well, but the other malt brands are also doing quite well. I think that here it's a combination of premium blockbuster brand and also a specialty brand that allowed us to gain share. Our intent is to keep gaining share, doing a good job on our portfolio strategy, on our brand platforms, on our last three feet execution. During COVID-19, the fact that we have a strong portfolio and a strong distribution network has helped. That momentum, we already had it before. That's our intent to keep gaining share on our key brands in the future.
Perfect. Thank you, Gilles.
This brings our call to a close. Thank you very much, ladies and gentlemen, for your time. Thank you very much, Gilles. Have a good afternoon or morning if you're calling us from America.
That does conclude the conference for today. Thank you for participating. You may all disconnect.