Around the world, Pernod Ricard's beloved portfolio stayed strong, even while lapping a post-COVID super cycle of previously unthinkable volumes and sales. Today, amidst a tighter global economic environment, its customer loyalty, strong margins, and commitment to execution in its must-win markets of the U.S., China, India, and global travel retail, keep the stage set for outperformance. In 2024, the company's accelerating its strategic investments, including Scotch, Irish whiskey, and bourbon, which I know we'll be researching tonight with verve and intensity. Here to tell us more is Chairman and CEO, Alex Ricard. Alex, welcome. Thank you.
Well, thank you very much, and good afternoon to all of you. It's a real pleasure to be here. My name is Alex Ricard. I'm Chairman and CEO of Pernod Ricard, and I'm joined on stage with Conor McQuaid, who's Chairman and CEO of Pernod Ricard North America, Florence Tresarrieu, who's Senior Vice President, Treasury and Investor Relations, and Edward Mayle, Investor Relations Director. So if the clicker... The clicker doesn't work? Let me try it. The clicker doesn't work. Okay, maybe there's the other clicker.
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Ah, there we go. So, by the way, this is my, my very first, CAGNY, and, so I was told that many of you aren't really familiar with, Pernod Ricard. So this presentation, is about getting you familiar with who we are, who Pernod Ricard is, what we stand for, what it is we do. And by the way, to start with, our, our vision or our purpose, which is written on, on that cover, Créateurs de Convivialité. We have French roots, but we're a global company, and Créateurs de Convivialité is what gets, gets us up every, every single day, every single morning, the desire to come to work. Because what we do, our purpose is to bring people together around our brands and unlock that magic of human connection.
Pernod Ricard was founded in 1975 through the merger of two French family companies. The first one, Pernod, born in 1805, and the second one, founded by my grandfather, Paul Ricard, in 1932. Now, almost 50 years ago, these two families decided to merge their businesses with one very clear vision: to stop fighting within a limited market, which was France, and a limited segment, which was aniseed spirit or pastis, because both represented 95% of the business. And so 50 years down the road, exactly 49 years down the road, you now have the world number one in premium international spirits company, globally number two, with 20,000 employees around the world, roughly EUR 12 billion of net sales, and a business with global scale.
You might be familiar with some of these brands, but Martell Cognac, which is the second largest cognac in the world, Jameson Irish Whiskey, the number 1 Irish whiskey in the world, Absolut Vodka, number 2 premium global vodka brand, Chivas Regal, which is the number 2 super premium Scotch blend in the world, and finally, Ballantine's, which is the number 2 premium Scotch blend globally in the world. These five brands are billionaire brands in retail sales value. Now, before we carry on, I'd like to share with you a little movie that tells the story of Pernod Ricard.
In 1975, two family businesses competing in the market of anise-flavored spirit called pastis decide to join forces. Pernod, born in 1805, and Ricard, born 127 years later in 1932. Together, they form the group Pernod Ricard. But their vision goes beyond France. In the 1980s, the group lands in America and acquires Austin Nichols. Then in Ireland, where it seizes the flagship, Jameson. With the thirst to be first, it continues its expansion and establishes itself in Asia. In the early 1990s, the emergence of industry giants strengthens Pernod Ricard's determination to go even further. In 2001, it snaps up the Seagram's jewels: Chivas, The Glenlivet, Martell. In 2005, the group acquires brands including Ballantine's, Perrier-Jouët, and Mumm.
... And in 2008, it's the turn of Absolut Vodka. Sales outside France jumped from 5% in 1975 to 95% nowadays. Like Paul Ricard, its founder, the global group upholds caring management methods and a strong social commitment, born of its local roots, preserving the heritage of each of its brands, respecting their origins and terroirs. Today, Pernod Ricard, the world's number one in premium spirits, remains a business with a soul that still shares family values. With a wide portfolio of brands distributed in more than 170 countries, we are very proud of what we make, but we're even prouder that every one of our spirits, wherever they are enjoyed, is a provider of what we call Convivialité. This means bringing people together to enjoy authentic moments.
We believe the world needs more Convivialité, and you can count on Pernod Ricard to always be there to provide it.
Yeah, so that vision, back in 1975, to expand beyond France and the anise category, and going from 5% exports to 95% today, and present basically in, if not all, almost all key spirit segments around, the industry. So our business model, Pernod Ricard's success, is grounded in two absolutely timeless human needs. Two human insights that date back as far as human civilization goes. Now, by the way, the first evidence of fermentation, industrialized fermentation, goes back to 13,000 BC. First evidence of wine goes back 6,000 BC. The first evidence of distillation goes back 3,000 BC, and the first pot still was invented in the year 800.
And then whiskey and vodka expanded and developed in the 1400s. Then international spirit trade developed in the 1500s, and then you had strong industrialization in the 1800s, and then in the 1900s, you basically had globalization and consolidation. And as you've seen in the movie, Pernod Ricard is an industry consolidator. I could go on and on about a 15,000-year-old industry, which is gathered around socialization. The second human insight we call Premiumization, is about improving quality of life, is about desired progression, and I'll dig into Premiumization in a few minutes from now. We operate in the most dynamic segment of a very attractive beverage alcohol industry. If you look at the total beverage alcohol market, which is basically mainly wine, beer, and spirits, its growth value is roughly a little bit more than EUR 1 billion or $1 billion.
That industry, that segment, has grown on average 4% annually over the last 10 years. That's a 4% CAGR. Within that, almost half a trillion, EUR 451 billion euros, represents the total spirits market, which includes local and international spirits, and that has grown on average 6% over the last 10 years. Finally, within that, you have international premium plus spirits, which is exactly the segment in which we, Pernod Ricard, operate, which is worth a gross market value of approximately EUR 120 billion euros, and that one has grown by roughly 7% annually. This translates, by the way, to a baseline, a net, net sales value baseline for industry suppliers, such as ourselves, of a little bit more than 4%. Now, this segment has proven to be particularly resilient over time.
On the left-hand side, you see a graph where you see basically global GDP growth, and in blue, you see international spirits value growth. There's obviously a strong correlation between GDP growth and international spirits value growth, but you see that generally speaking, international spirits value tends to trend ahead of GDP growth. That's how resilient that segment is. On the right-hand side, I decided to show you that graph, which is the growth in the U.S. of total beverage alcohol in value from 1992 to 2022. That's quite remarkable, by the way. The spike on the top end right side of that graph is the spike during pandemic. So very resilient over time. Now, there are a number of mega trends that really underpin our long-term growth. I've chosen three main ones.
The first one is basically the global increase in legal drinking age population. There's a direct correlation, and global world population is expected to increase by roughly 2 billion by 2050. That's the first mega trend. The second mega trend is the global increase of middle and affluent classes, and I, I'll dig into that one later when we talk about China and India. But again, there's a very strong correlation between the expansion of international premium spirits and middle and affluent classes. And the third global mega trend is the women increasing share of consumption, particularly of spirits. So these three mega trends clearly underpin the growth of our segment. Now, if we combine this to consumer-driven trends as well, this really sustains growth as well. So we benefit from that point of view of three big trends as well.
The first one is the crave for experiences, experiences and services, and consumers spend more and more of their discretionary money on experiences, and we're all about experiences. And we engage with consumers through experiences in the trades, in key accounts, through sponsorships, through partnerships. You, you're gonna see us more and more, you already do, in festivals and concerts. Experiences is a big, big trend which people crave for. The second consumer need is status or self-expression. Tell me what you drink, and I'll tell you who you are, and I'll tell you what you stand for. And this is why we invest heavily behind our brands to position them with their specific set of values, while being absolutely authentic and true to the brand's origins. The third and final consumer-driven trend is convenience.
And by the way, that trend accelerated during the pandemic, like many trends accelerated during the pandemic. And you see this with the strong surge of RTDs, ready-to-drink, and RTS, ready-to-serve. So these are the three consumer-driven trends which further benefit our segment. Now, I mentioned premiumization as a basic, timeless human need, the desire for improving quality of life, the desire for progression. And this chart is pretty clear and straightforward about premiumization. So you have the trends from 2000 till the global financial crisis, where you saw premium plus, so premium, super premium, ultra-premium, and prestige categories really grow much faster than standard and really drive the category growth. But then came the GFC, 2008, 2009, and that trend, that premiumization trend halted.
As it halted, a number of experts came to the conclusion that premiumization was dead, that premiumization was definitely over. And the reality is, as a matter of fact, that halt in premiumization lasted 8-10 months, and then our industry experienced the fastest degree of premiumization in history until the pandemic hit us in 2020. And when the pandemic hit us, again, for some, it was the end of premiumization, the end, by the way, of the on-premise, the end of traveling, the end of travel retail. And, well, growth surged and became what we call, we now call or refer to as, and that's proprietary to Pernod Ricard, but anyways, post-COVID super cycle, which ended more or less a year ago.
So we've had three years of phenomenal growth, 2021, 2022, and the beginning of 2023, and then we're basically recycling abnormal growth, and we call this normalization. We believe that normalization is more or less over in the rest of the world, with the exclusion of the U.S., where growth rates were more than double their underlying usual trends. Until we recycle this trend, we'll see soft growth in the U.S. market. We believe this will last between now 6-12 months. These are the trends. I've spoken about the external factors, you know, that are benefiting our industry. I wanna now talk about what makes us unique, not as an industry, but as an organization, as a player in the industry, as Pernod Ricard.
So I already presented these, these five brands, but over time, we have built the most comprehensive, diversified portfolio of brands in the industry. We have strategic international brands. We have strategic local brands, particularly our Indian whiskeys, where we enjoy almost 50% market share. We have our prestige brands, and we have our specialty brands. By the way, last fiscal year, which was a record-breaking year for us at Pernod Ricard in terms of growth, our growth came. 80% of our growth came from six different spirit categories, and that's the intent: to diversify the sources of growth through the most comprehensive portfolio of spirit brands in the industry.
I think that in an era of volatility, of different cycles, it's really important to have a wide portfolio of brands and to be agile in the way we allocate our resources behind the brands. Now, what do we stand for? What is our expertise? Our expertise is brand building. We're passionate about brand building. It's all about building the equity, the long-term equity of our brand in the most relevant way, and keep on recruiting always in an environment of drink less, but better, which is what we like. And I won't talk about it. I think there's a nice movie with a very illustrative example, which is the Jameson success story.
Our family makes us who we are. At Jameson, we are the world's biggest family. A family that was not born, but is made of many different people who all share the same spirit. East Side, West Side, we invite everybody in. Bringing bartenders, culture makers, influential movers and shakers, and distributor partners over to our side. Our open welcome has opened up an Irish whiskey renaissance. Jameson is the world's favorite Irish whiskey, the world's most awarded Irish whiskey, a top 10 global spirits brand, and the number 3 global whiskey brand. Growing U.S. market share from 1%-9% in 10 years, and growing global volume from 3 million-10 million cases in 10 years. So how does Pernod Ricard serve up success again, and again, and again? With our cocktail of magic ingredients, that's how.
We serve up juicy moments of consumption, celebrating music, meaning, culture, connection, and community, with an added Pernod Ricard zest. We know exactly when and where our family likes to chill, using proprietary data and technology to deliver a satisfying mix of media-owned assets. We share one spirit. We bring a sparkle of wit, and together, we make the world a more welcoming and convivial place. Here's to toasting Pernod Ricard's next brand success.
So I can't wait for the run-up to St. Patrick's Day. I won't spoil the mystery about it, but a huge activation plan around Jameson as we run up to the 17th of March. We grow our brands organically, but we also acquire brands, and we've developed a bolt-on acquisition strategy over the years. We've acquired Monkey 47, one of the fastest-growing prestige gins in the world. Just as an example, by the way, Lillet, we acquired Lillet in 2008. April of 2008, the brand was roughly 40,000 cases. Today, Lillet is close to 1.3 million cases, and just happened to find out that it's one of Taylor Swift's favorite brands. She likes...
It's called the French Blonde, and it's a cocktail with Lillet in it, and obviously, we're happy, we're happy to serve. We also have Bumbu, which we distribute, fastest-growing super premium rum. And more recently, the acquisitions we've made were specific to increase our exposure to the North American market, number one, and increase or get exposure to the most dynamic categories. Example, Código tequila. Obviously, after ready-to-drinks, it's the fastest-growing spirit category here in the U.S., thus Código. Skrewball, which right after tequila is the most dynamic spirits category, indeed. And I was mentioning that RTDs are the fastest-growing category, so with Ace Beverage Company ready-to-drink cocktails. The other most dynamic category is bourbon and North American whiskey, which led us to the acquisition of Jefferson's back in 2019.
Ever since we acquired Jefferson's, you see, the CAGR over the last three years above 20%, and we're currently building a distillery, which I'll be visiting tomorrow in Kentucky. So we grow our brands, we acquire beautiful gems that we then grow with our business model, but we also innovate. We innovate to accelerate growth. With the recent introduction, I think it was last month, of Absolut Ocean Spray, huge success, flying off the shelves. I happened to learn as well, Kim Kardashian posted about Absolut Ocean Spray. The Glenlivet Twist & Mix, really breakthrough innovation, two cocktails ready to mix. More recently as well, which was launched in some European markets in January, Beefeater Zero, which is a non-alcohol gin expression.
Innovation at the service of premiumization, with increased exposure and investment behind Jameson Black Barrel. So I mentioned our portfolio of brands as a distinctive characteristic of Pernod Ricard, what we believe is a competitive, unique advantage. The second competitive advantage, which is quite unique to us as well, is our granular approach to customers and consumers through our route to market. Our route to market is extremely balanced. First of all, from a regional point of view, one-third Americas, one-third Europe, and one-third Asia. It's easier to remember that way. It's also perfectly balanced in terms of mature markets and emerging markets. 55, 45, I tend to say half and half. We have four must-win markets that really make a difference and that drive a lot of industry growth. The U.S., one-fifth of our business, global travel retail, China, and India.
Just a couple seconds on China and India. They each represent a little bit more than 11% of our net sales. In India, just to take that example, we have 45% market share in the segment in which we operate, and the legal drinking age population is growing by 20 million per annum. In China, and that's easy also to remember, we have market share of 45% as well of the segment in which we operate. And the middle class and affluent classes in China are growing on average by 27 million per annum. And we have double exposure to India and China, with very strong leadership in both markets. The third and final specificity of Pernod Ricard is our culture and values.
Going back to my grandfather, Pernod Ricard is a business with a soul, and this is basically what really attracts entrepreneurs that wanna join forces with us and do business with us and partner with us. And here you have Brett Berish, who's CEO, creator of Sovereign Brands, and he really decided to partner with us because he felt the passion, the engagement, the dedication Pernod Ricard colleagues have behind our brands. And so that's what drove him to us. But not only is Pernod Ricard a business with a soul, it's also with sustainability and responsibility, which is embedded throughout our business. You know, we source everything we use to produce our products comes from Mother Nature. We source roughly 120 ingredients from around the world, whether it's wheat, barley, maize, grape, potato, agave, dasylirion, lemon, lime...
I'm not gonna give you the list of 120 ingredients, but it's a pretty long list. So we have a very clear sustainability and responsibility roadmap called Good Times from a Good Place, with four clear pillars. The first one, nurturing our terroir. The second one, valuing our people. The third one, circular making, and the final one, which is very specific to our industry, which is responsible consumption or responsible hosting. We have a total of 33 very specific KPIs. I chose just a few here that we track, some on a monthly basis, others on a quarterly basis, others every 6-12 months. Just to show you a little bit what we do from an S&R point of view, there's a little movie, it's the last one, on what we do from an operations standpoint.
Yeah, this is probably one of the things I'm the most proud of. I mean, this is what we do. We operate state-of-the-art distilleries. We produce very high-quality products that we then market and sell around the world. These distilleries are living, operating museums, and the workers are so proud to go work every day in these facilities. It's something I'm very proud of. We also have developed a very simple growth model based on six axes of development, and our teams around the world are empowered to basically see how they best allocate resources to drive that growth around these six axes. One of them is about portfolio optimization, the other one is about the prestige opportunity. The other one is about revenue growth management.
Then you have innovation, a route to consumers, and finally, experiences and services. And this growth model is powered by tech and data. So we have four key digital projects which we're deploying around the group that all fit together. The first one is called Maestria. It's consumer data analytics, basically mapping out demand occasions and the profit pools by demand occasion, and therefore, developing portfolio strategies by market and by channel. Then you have Matrix, which is all about marketing optimization by consumer touch point, and we've developed internally a proprietary algorithm to do that. We've done the same for promotion and pricing efficiency. And finally, we have our own sales force activation tool called D-Star.
Now, the ultimate vision underpinning this is every leadership team in market strategically planning the whole year activations based on, fact-based, data that they get. So you saw that little film, with all these distilleries. It has a cost associated to it. We call this investing for future long-term growth in our business. Historically, we've invested between 4%-4.5% of our sales in CapEx. This year it's gonna be a lot more than that, and so it will for next year as well. This year, we're probably gonna invest roughly EUR 800 million. We're doubling our capacity in Midleton to sustain future growth for Jameson. Midleton will end up being the largest distillery in the world.
So tomorrow, I'm flying to Kentucky, where we're building a $250 million distillery for our bourbon, Jefferson's, and sustain its growth. We're building additional capacity in Scotland because there's huge growth opportunity for single malts, particularly in Asia. And we're now building aging warehouses for our Chinese malt whiskey, which is brand new. So, investing for the future organic growth of the group. And we're also investing in specific, very innovative technology to turn our distillation capacities around the world completely carbon neutral. There is a technology called MVR, Mechanical Vapor Recompression. If you're interested, I'll explain later on. Anyways, but I'm very passionate about it. We're also increasing investments in our aged inventory, what we call strategic inventories.
We have roughly a little bit more than EUR 6 billion worth of aged inventory sitting on our balance sheet with an average age of 7 years. So we're roughly increasing that inventory by EUR 400 million-EUR 500 million per annum. Of course, I sat in on a few of the presentations today, so everybody mentions their capital allocation priorities. We have some as well. They're very clear. Priority number 1, number 1, we invest in our future organic growth, and as I mentioned, through strategic inventories in CapEx. Then we move to priority number 2, which is active portfolio management, particularly regarding M&A, from a bolt-on acquisition strategy point of view. Priority number 3, dividends. We have a payout ratio of roughly 50%, aiming at consistently growing dividends.
And finally, the last priority, number 4, is share buyback, and all of this, of course, while maintaining investment grade rating. So we have clear allocation, capital allocation priorities, but we also have a pretty clear medium-term financial framework we've worked on. I mentioned earlier on, the baseline net growth as a supplier in the industry is 4%. We believe on average, that we can, you know, drive between 4%-7% top-line growth. And we believe that because our diversified sources of growth from a portfolio standpoint, from a geographical standpoint, and with our innovation strategy and digital capabilities, that we can aim for the upper end of, that range. We continue to focus on revenue growth management, particularly leveraging our digital capabilities, Vista RevUp. We continue to improve our operational efficiency, of course.
We will maintain our A&P investments behind brand building at roughly 16% of net sales, and every efficiency is reinvested behind our brands, and we're leveraging, of course, our digital programs, in particular, Matrix. We have a very strong discipline on our structure costs, and of course, making choices in terms of prioritizing our investment levels, and with the aim of cost increase lower than top line. All of this delivering operating leverage of roughly 50-60 basis points, provided we're in that 4-7 top line range. By the way, this is broadly exactly what we've been delivering over the last few years with ups and downs, but on average, we've delivered that financial framework.
All this with the aim of basically doubling the size of our business over the next decade, and see an increasing number of brands join our billionaire brands list of five, because we do believe that scale is of the essence in our business. If I had to summarize a little bit in a nutshell, what we like to call our winning formula. Well, I've gone through these favorable long-term drivers, with the demographics, the legal drinking age population growing, the middle and affluent classes growing, increasing female consumption in spirits. Gone through the consumer needs as well, experiences, thirst for experiences, self expression, and, and convenience, coupled with or multiplied with what is unique to Pernod Ricard, with our diversified portfolio of brands, our broad-based, very balanced footprint, and our unique culture. That's what we believe is our winning formula.
On that note, I think we can move on to Q&A, should you have any questions. Thank you.
Yeah, thank you. Thank you, Alex. Could I just explore a little bit more your ambitions for the US market, you know, maybe post-normalization we're going through at the moment? I think, you know, when you took control, you know, of the business, I think one of your core ambitions was to really grow your business in the US in line with the wider spirits market. Clearly, been ups and downs on that journey over the last 10 years, not least because you haven't had super premium tequila for much of that period. You highlighted a lot of the M&A that you've done of late. When we look forward maybe 2 years from now, should we be thinking that the- your US operation will be growing in line or ahead of the market?
Or do you think you still need to add to your portfolio to be able to deliver that objective?
Well, thank you for the question. I think it's the perfect opportunity for me to to hand over to Conor McQuaid, who's our newly appointed Chairman and CEO of Pernod Ricard North America. What do you think about it, Conor?
Thank you, Alex. Thank you, Simon. No, I think very much the work that's been done over the last number of years sets us up for success. The portfolio gaps that we clearly had, and as you mentioned, we have addressed those. We believe now we've got the portfolio as required. That's not to say that we won't keep our eyes and ears open for other opportunities, bolt-on opportunities, as they present themselves. We've built serious capabilities in areas that we were probably a little bit behind the curve in having in our business and in our teams, and also with the deployment and the acceleration of the key digital programs that Alex mentioned earlier. I believe we now have the recipe for success.
In offering me the job, as Alex did a number of weeks ago, he gave me three priorities, which were execution, execution, execution. And that's what we need to double down now, working with our wholesale partners and working with our teams to really deliver against what we've been given, which is a formula, for success going forward. So that's where my focus will be, and that's where the team are ready and prepared to take the challenge to the next stage. So ultimately, the goal remains to grow ahead of the market as we go forward, and that will be the aspiration we'll hold to.
Over there? Sorry.
Thank you. Robert Ottenstein from Evercore ISI. A couple of questions. I think you noted that your global investment is about 16% of sales globally. On your conference call, if my memory serves me well, I think you mentioned in the U.S., you were gonna increase it from 18%-20%. And my recollection is that Diageo, at least globally, is talking about increasing their investment, presumably in the U.S. as well. So the first question is just to try to understand a little bit better, you know, what's going on in the U.S. market, such that investment by the two leading players is going up as a % of sales? And then, why the investment level in general for you is higher than global? So that's question number one.
And then question number two, I think we all understand there was, you know, this super cycle of compounding 8% growth for 3 years, which was an amazing period. And I think you've mentioned 6-12 months to get back to normal. Is the range there more a function of just the pace of, you know, kind of the... and the strength of the consumer in the U.S.? Or is it just a, you know, a very honest admission that nobody really knows what people have at home, right? In their home bars, right?
... and so, you know, the idea being that, you know, it's gonna take time to get through those home bars and, you know, 6 months or 12 months, and wondering if you have any data on that. Thank you.
First of all, on A&P, our global ratio is 16%. We've already moved from 18%-20% in the US this year, so it's done. And by the way, it's partly funded by two things. The first one is we've reallocated a little bit of money from China to the US from that point of view, because in China, you have some macro headwinds. And so, we adapted our investment strategy from an A&P point of view to that. We're still the number one investor behind brands in our segment in China, but we've lowered a little bit these levels, and so have the other industry players. So reallocation. And number two, efficiencies. I mean, I was mentioning Matrix.
I mean, we're driving quite a lot of efficiencies, which are allowing us to reallocate efficiencies to what we believe are, you know, strong growth markets. And fundamentally, I do believe the U.S. long term is a strong growth market. It is a market that has grown on average 4%-5% over the last 20 years. During the super post-COVID super cycle, that growth rate skyrocketed to 8% per annum for 3 years in a row. So if you take an index 100, just post-COVID, that index went to 124 versus a trend that would put it at 112. So you do the math on that, and until you recycle this, which six months ago, we said it's gonna take between 6-18 months.
Now we're saying it's gonna take between 6-12 months. That's exactly what we're talking about. We don't have any visibility on what's at consumer, you know, consumer inventory level. I'm gonna be honest with you, we don't have any visibility on what's at consumer, you know, consumer inventory level. And frankly, you know, once it's gone and dusted, it's fine. So it's technical, it's gonna take time, but it did start basically at the same time interest rates started to go up. So, you know, how long is the normalization gonna take place? Again, I, you know, right now, our central scenario is from now on, between 6-12, versus 6 months ago, between 6-18. Your second question was?
A&P.
Hmm?
A&P. A&P ratio.
Yeah, the A&P ratio is gonna stay at 16%.
Stay at 16.
So it's not gonna-
The U.S. will stay at 20?
Yes, yes. Yeah, because of the potential. It's one of the most profitable markets in the world. When I was at school here in the U.S., I remember one of my macroeconomic teachers telling me, "Never, ever, ever, never underestimate the American consumer." I think it's right.
Thank you.
Céline?
Thank you. My question is regarding premiumization with the big chart or the chart with the very steep curve that you showed. The U.S. has gone through a strong premiumization. I think you mentioned that. And right now, we are going through the super cycle normalization in volume. But can you talk about normalization as well in pricing? Because it has been quite strong, as well as mix, because we've seen that some of your competitors have cut prices. So that will be my first question. And then the second question, China, which you mentioned, have a strong growth potential, but economic growth that has been crippling performance for now. Can you give us a bit of an idea of how long do you think that will last?
So on your first question, to be fair, I mean, there is normalization of premiumization happening. During the pandemic, when basically consumers were stuck at home because the on-trade was closed, the budgets they had available, you know, they literally used it to trade up. You know, and now that they're going back up, they're normalizing, I would say, their habits. So there is that, premiumization slowdown, which, again, is temporary, but I think it was an interesting experience. Give money to consumers in our industry, and what do they do? They trade up. So there's a link between, you know, GDP growth, as you've seen, and premiumization, for sure. Prices, to some extent, have adjusted, but not that much.
Maybe in one specific category where we're underrepresented here in the US, prices might have gone a little bit too far because of supply constraints, by the way, as well. And now you see people going back to in our industry, and ourselves included, we're going back to normal pricing, which is related to inflation, as we were doing so before that high inflationary period, and to normal promotional activity. So we're back to promoting our brands, as we have always done, except last year during the high inflationary period. And by the way, you know, we had reached a level of growth, particularly on the volume front, on aged spirits, which was such that we were starting to have supply constraints. So we deliberately also wanted to slow down volume from that point of view.
On China, it's difficult to answer. You know, it's a macroeconomic question. What is China's GDP growth gonna be forward? What is the Chinese government gonna do to get their economy growing again, and so on and so forth? I have no idea. In the meantime, you all probably saw the press over the last couple of days on traveling, Chinese New Year traveling, which is back to above pre-COVID levels. It's the first, I would say, normal Chinese New Year in five years for Chinese households. We, they're all on vacation, so I don't know how Chinese New Year went. We'll have the data in four weeks from now, so we won't know until then if Chinese New Year was good or not.
I do believe the Chinese economy still has pretty strong growth potential going forward, and in particular, our consumption pool, which is middle class and affluent Chinese households. And just bear in mind, I gave you the numbers, it's growing by 27 million a year. But bear in mind that our penetration rate, the penetration rate of international premium spirits, volume-wise, in China is 2%, which is very low.
Thank you very much, Alex. That's all the time we have for questions. Before, Alex is gonna say a few words about-