Thank you all for standing by, and welcome to today's Q3 FY 'twenty one Sales Conference Call. All the presentation for today will be followed by a question and answer session. Please be advised, the call is being recorded. And I would now like to hand the call over to your speaker, Ms. Julia Maki.
Thank you very much, operator. Good morning, ladies and gentlemen, and welcome to our Q3 sales call. We're hosted this morning by Helene de Tissot, Our CFO responsible for Finance, IT and Operations will take you through a brief presentation and then answer your questions. Helene, over to you.
Thank you, Julia. Good morning to all. So let's start with the 9 months sales presentation. So we are delivering excellent Q3 at +19%, which is a marked return to sales growth for the group in the 9 months period, the figures being plus 1.7 percent organic sales growth, minus 3.7% reported sales. So if we start by the performance by market, This performance is driven by the dynamism of our must win domestic markets with U.
S. A. Continuing to grow mid single digit China delivering a plus 34% in the 9 months and India back to double digit growth in Q3. Europe is continuing to display strong resilience, thanks in particular to our performance with Scotch and Specialty Brands despite the COVID related restrictions. Travel Retail is starting to lap easier comparison base, That's still very subdued with limited passenger traffic.
If we look now at our brands, our strategic international brands are growing by 1%, So returning to growth, which is driven by Martell, Malibu, Janssen and Beglen Yvette. Absolute and our blended Scotch portfolio are still in decline as they are very impacted by the travel retail exposure. Strategic local brands are now stable, thanks to double digit growth of Kahlua, Passport and Ramazzotti. Our specialty brands are growing strongly at plus 22% With continued strong dynamism at Lillet, Malphine and Arbor Loire in Western Europe and Tequila and American whiskey in U. S.
Strategic wines are growing by 2%, particularly thanks to the off trade dynamism in U. K. And Canada. Let's move now to our must win markets, starting with our number one market, the U. S.
USA growing by plus 6% in the 9 months with the sellout continuing to grow at robust mid single digit, thanks to a dynamic of trade driven by the Ben Yvette, Malibu, Calua, Tequila and American Whiskey Portfolios. Jameson is softer in Q3, which is due to the lapping of the Cold Brew launch, which happened in Q3 in fiscal year 'twenty. Black Barrel is continuing to grow dynamically. The on trade in the U. S.
Is still in its line but improving, thanks to the reopening through Q3 and accelerating in March. China is growing by 34%, With Q3 sales in triple digit growth due to very strong depletions and lapping low comparison basis, We had an excellent Chinese New Year with double digit depletions on all key brands. Martell is in very strong growth We have positive mix driven by Cordon Bleu, and we announced price increase in April. We had as well continued very strong dynamism of The Glenlivet Royal Salut, Absolute and Chivas in China. Global Travel Retail is at minus 50% for these 9 months With a softer rate of decline in Q3, which is mainly driven by the lapping of low comparison basis, notably in Asia, We continue to have a positive performance of offshore duty free islands in Henan and Jeju.
India is stable in this 9 months period with all the brands in double digit growth in Q3, with excellent growth of international brands portfolio and a better mix within the Seagram Indian whiskies portfolio. COVID-nineteen resurgence is obviously happening now in March April, leading to new restrictions in India. If I move now to the other key markets performance, starting with Europe. Europe is at minus 3% with Germany delivering outstanding growth, thanks notably to Hammadotty and Lillet. U.
K. Has as well continued excellent growth, Driven by wines, absolute, Jameson and the Glen Yvette. Eastern Europe is in high single digit growth, which is driven by Russia and Poland. France has good off trade sellouts, driven by Ricard, Absolut and Abertor, but on trade is still closed. And Spain is facing continued weakness due to the on trade restriction and its high exposure to the on trade channel.
Americas is at plus 4%, with Canada delivering high single digit growth, primarily driven by Jacob's Creek, The Glenlivet and Absolut. Latin America, with Mexico in double digit growth driven by scotch and Absolut and a very dynamic growth in Brazil. Asia Rest of the World is growing at plus 3%, with Japan in decline due to the on trade restrictions despite good resilience of page rates. In Korea, our strategic international brands are driving a very strong growth in the off trade. In Africa and Middle East, we have a double digit growth, which is driven by Turkey.
So moving now to the conclusion and the outlook for fiscal year 2021. Again, we had an excellent Q3, Plus 19% marking return to sales growth in this 9 month period with a good resilience throughout and strong dynamism of domestic must win market. For the full year 2021, in a still uncertain and volatile context and with the current information available on the pandemic, Pernod Ricard expect to continue implementing a clear strategy with acceleration of our digital transformation. Sales acceleration, thanks to continued business recovery with the on trade gradually reopening, but travel retail still very subdued Dynamic Resource Management with strong reinvestment were efficient with the E and P expected at circa 16% ratio for fiscal 2021. We expect organic operating leverage, thanks to dynamic top line and structural discipline and as well a significant Negative FX impact of €250,000,000 linked to the euro appreciating versus U.
S. Dollar And as well, this is emerging market currencies. So for the full year 2021, our guidance is the following: Organic growth in profit from recurring operation of circa plus 10%.
Thank you very much. Helane, we'll turn to your questions, please. Operator, please can you put through the first caller, please?
Thank you. We will now begin the question and answer session. The first question is from the line of Edward Mundy from Jefferies. You may ask your question.
Good morning, Helane. Good morning, Giulia. 3 for me, please. The first is on your guidance for Organic operating leverage. I was wondering whether you're willing to share what you think this might imply for sales for the full year?
The second question is on margin expansion over the medium term. Your Transform and Accelerate program Between fiscal 2019 2021, it's coming to an end at the end of this year. I was hoping you might be able to share your degree of confidence for operating leverage beyond fiscal 21. And what some of the major initiatives might be that could be underway? And then the third question is on the FX Guidance, I think historically, you've guided for roughly 1% move on the euro dollar is worth roughly €10,000,000 It feels like that's unraveled a little bit, possibly given some of the emerging market FX volatility.
We think that your FX Impact of sales is more like 5% or 6% for the year. The guidance implies about 10% of EBIT. I was wondering if you could help us sort of reconcile some of the moving parts there.
Okay. Thank you, Ed. So starting with the guidance. So Obviously, we are guiding on the growth organic growth from our recurring profit from recurring operations. So I'm not going to give you a precise number in terms of top line.
What I can tell you is that we are expecting the sales to accelerate In Q4, knowing that obviously we're going to lap as well favorable conversion basis, and I'm sure I'm going to have a chance Come back to the dynamics of the different markets. So back to the question on the leverage. What we see now is more dynamic sales growth for the full year, especially thanks to China, where we had this excellent Chinese New Year performance And as well, thanks to the U. S. With the acceleration of the on trade reopening with obviously strong correlation with the High paced vaccination campaign.
Europe is holding as well better than expected despite the new COVID restrictions with Still a very resilient upstral. We'll see what could be coming in terms of reopening of the on trade. So To cut the long story short, the shape of our P and L is going to be a higher bottom line growth than top line, thanks to this stronger top line, We see that then going to create a greater gap with the structure cost evolution. So that's why we have some leverage in the guidance. We still expect some pressure on gross margin, But obviously, it's quite difficult to be more specific on that as they could be moving parts here and there.
For the A and P investments, we are I was consistent with our previous discussion with this indication of the ratio which is still expected at circa 16%, which is showing the strong ambition we have behind our strategic priorities. Maybe if I move now to your question on the, more or less, mid term strategy, margin expansion and Transform and Accelerate. You're right. I would say the framework of Transform and Accelerate that we shared already more than 2 years ago We're covering fiscal 'nineteen to 'twenty one. So we're going to close 'twenty one in a few months' time.
Having said that, Our ambition remains unchanged. As you know, we believe that this is a very relevant strategy, which has Agua Obviously, strong deliver in good times as well in this crisis. So we continue to implement that strategy. Moving forward, I would say that as long as we have some impact of COVID-nineteen in our base, This might distort a bit the ambition we had in our Transform and Accelerate numbers. But Again, our ambition remains unchanged, and we believe this is a very strong strategy.
For the FX guidance, you're right, we gave some sensitivity for the U. S. Dollar, which It's not changing dramatically in terms of visibility. It is still relevant. But we are It's quite strongly impacted by the emerging currency evolution, and you have obviously the detail in our 9 month Figures, so that's why we believe we could have this significant negative FX impact For the full year, which is going to be probably quite strongly impacted in terms of weight by the Emerging market currencies versus the U.
S. Dollar.
Great. Thank you.
You're welcome.
The next question is from the line of Simon Hales from Citi. You may ask your question.
Thank you. Good morning, Alain. Good morning, Julia. 3 from me as well, please. Firstly, can I just ask a little bit more about the U?
S? Obviously, 6% sort of growth for the 9 months. It looks like there's been a bit of an acceleration through Q3, As you would have thought. Now is that is the growth in Q3 that you saw in the U. S.
All depletion led? Or is there a little bit of Inventory movement in there as well. And maybe associated with that, as we look forward into Q4, how are you thinking about sort of stock levels in trade as we look into Q4? Are you expecting to see a little bit of restocking as the reopening really gets further underway in that market? Secondly, just on China, can I ask you around about stock levels sort of post Chinese New Year within the wholesalers, what the situation is there?
And also, I may have missed this, Ellen, but did you quantify the size of the price increase you took in April on cognac? And then just finally, I
wonder if you could just give us
a bit more detail on India, what you're seeing happening on the ground at present there, a little bit more color As to how you see things developing over the next sort of couple of months. Thanks.
Okay. Thank you. So let's start My question on the U. S. So going back to the Q3 figures, so I would say it's fair to say that in this Q3, you have some effect of the on trade acceleration, which is obviously then leading retailers to prepare that reopening quite, I would say, dynamically.
And this is very true, especially, I would say, the month of March. But this is the acceleration of the reopening is Really started, let's say, early March. So that's why there could be some higher, let's say, trends for Q3 versus The first half. So no restructuring per se, just let's say a very active preparation of the reopening of the untrade, for which, as I said, the acceleration has been quite Significant in the last week of March. So for the trend in Q4, obviously, it's still Too early to tell for the U.
S. What we know is that obviously, the key question is going to be what would be the Respective dynamics of trade versus on trade and especially at the time of the On trade coming back, what would be the strength of the year of trade? So directionally, we could expect some softer of trade versus the 1st 9 months, knowing as well that in the variance in the most percentage, we are Cycling at Francois L'Oreal, as you know, and it happened already a few weeks ago. But this, let's say, softer of trade Should be upset by the reopening of the on trade. The question obviously being how much.
So we still believe the U. S. Is a very resilient market Strong structural trends, obviously. So let's see again what would be the rhythm of reopening of So the entree, knowing as well, obviously, that the situation is already quite different from one state to the other. As you know, Some states like Texas and Florida are already quite, let's say, normalized in terms of reopening of the on trade.
There is still some easing of restrictions to happen in other key states for us such as California and New York. If I move now to China. So your questions were on the stock levels and price increase. So You didn't miss anything. I didn't mention, yes, the price increase.
So let me clarify this right now. We have announced at the end of March This price increase for Mattel in the context of excellent Chinese New Year, which obviously we believe is then favorable to price increase. The price increase is between plus 3% on most of our SKUs And plus 4% for the Cordon Bleu. And we believe this will enable us to strengthen our leadership in pricing. For the stock levels in China, so they are both in line with where we want to be at year end.
And By the way, I take the opportunity of that question to answer maybe more broadly on the level of stock everywhere, which are quite healthy everywhere. And obviously, our intention is to have this type of very healthy inventory levels for the dual lending. In India, so obviously, in India, the situation is changing probably from one day to the other. As you know, We are facing right now some restrictions in 2 key states and in others as well, and That's to the state of Maharashtra and Delhi. So for Maharashtra, there is a 2 weeks lockdown, which started a few days ago.
They started the restriction with a curfew, and then it moved to lockdown. So Only essential business are open. And in India, that means that The operator is closed for our business and so is our facility. There is This acceleration of the pandemic in Delhi that leads to this 1 week so far strong restrictions. And that's I mean, that's information we've been provided so far.
So That's, by the way, the type of disruptions we have taken into consideration in our guidance Because this is obviously the information available right now. So what to expect in Q4 is obviously a very good question. Disruptions for sure. We will monitor the situation there.
Brilliant. That's really clear, Alan. Thank you.
Welcome.
Our next question is from the line of Sanjit Aula from Credit Suisse. You may ask your question.
Good morning, Helen and Julia. A couple from me really on the U. S. I guess, firstly, on Jameson, You're lapping now the launch of Gold Brew last year. How would you rate the success of that innovation?
And are you confident That line extension can continue to grow in year 2, year 3. I think some of the previous line extensions from Jameson haven't Been able to sustain the initial momentum. So would love to get your assessment year end on that. And when you assess The U. S.
Performance more broadly. You didn't really talk about tequila and cognac. Are you satisfied with your performance across those 2 categories in the U. S?
Thanks. Okay. Thank you. So for Jameson, as you mentioned, we are Recycling the launch of Gobru last year, which happened at the end of Feb, Ahead of what was supposed to be a great opportunity with San Francisco Bay. And we are as well, by the way, Lasting, very significant pantry load for that brand.
Last year, as you know, there was this Thanks, Shlode, at the end of March in the U. S. And I would say in our portfolio, big trust And trial brands have been very much favored by that trend. So this is very true for Janssen. So Back to your question on cold brew.
So again, as I just said, obviously, last year, St. Patrick's It didn't happen the way it was planned to happen. The on trade is still significantly impacted in the U. S. Despite the acceleration of the reopening and the Genesys is very exposed to the oil trade as you know.
So We believe that there is still lots of opportunities with the whole group, which is a strong Innovation, it's going to be obviously much better when the on trade is going to be normalized. So that's what we're going to keep building with Kogou. I must say as well in terms of Jameson, Range, we have as well a very dynamic development of Black Barrel. This year, I would say, St. Patrick has not been a normal St.
Patrick as well for the 2nd year in a row because of the Disruption of the on trade. So we'll keep investing the Hain Jensen. Obviously, this is a star brand for us in the U. S, and we believe that Strong innovation, absolutely critical to support that dynamism. On your question on Takeda and FONIAT, Well, I must say, we did mention briefly in our exact summary the fact that the robust performance we were delivering in the U.
S, we have driven by tequila our tequila brands. So That's a strong growth relay for us mid term. And for cognac as well, obviously, the category is delivering an impressive growth. We have a very strong brand, Martell, which is still small in the U. S.
So that's again a great opportunity moving forward.
Our next question is from the line of Celine Pannuti from JPMorgan.
Question, good morning. I want to follow-up on the U. S. As in the previous Simple for you to give us the performance on on trade versus off trade in the 3rd quarter. And zooming on the states where you've seen On Trade operating in a normalized way, Can you talk to us about what is on trade doing and what is overall the balance between on trade and off trade in those markets where we have a normalization.
And then just following up still on the U. S, What is I think we are going to go through a tough comparison of trade, but as well on trade doing Easier comparison in Q2. But if you look at the remainder of the calendar year, how do you see that market growth overall? And then my second point is on Europe. We still have restriction that some markets seems to be opening up.
Are you also expecting some stocking as you have seen in the U. S. Ahead of trade reopening? Thank you.
Okay. Thank you. So I'll start with the U. S. So and I prefer to comment the 9 months performance than the quarterly one because I believe it makes more sense.
But I hope it will answer your question. So for the off trade first, we had a good performance, growing in the high teens, Broadly in line with the market. I would say same thing for the on trade. We are growing not growing, but performing broadly in line with the market, which means that On trade is still down in this 9 months, so probably down for us in the type of minus 40s. Knowing that we have a stronger on trade exposure than the market, which was around 75%, 25%, pre COVID.
So All in all, we are growing broadly line by channel, but we are impacted by a higher on trade exposure than the market, Which is leading us to a performance of mid single digit gas system market, which is probably still around the kind of plus 7%. Your question on the reopening of the on trade In the U. S. And what is happening in the off trade, I would say, honestly, it's really early days. So I cannot give you some, Let's say a very robust fact on what is happening.
What I can tell you, it's more from a consumer point of view, is that Even if a few months ago when on trade was reopening, we felt that consumers were sometimes a bit I'm comfortable to spend too much time in the entree. Now the situation looks much better. This is probably as well linked to To the pace of the vaccination campaign in the U. S, so we're in the states that I mentioned before where the on trade It's almost, let's say, fully normalized. I'm sure you saw the same stats, but The bookings are quite impressive, and people are very happy to go back to the on trade And I enjoy everything around the social gathering and on trade consumption.
So Too early to say, but I would say the first states that are having this normalization of the on trade I think quite robust, let's say, appetite from the consumers to come back to the on trade. Europe, it's obviously not the same situation right now. As I mentioned, we believe that there will be some gradual reopening of the on Trade in the months to come. This is still obviously quite volatile and uncertain in terms of exact Calendar, so I don't believe we can say right now that we see restarting. And anyway, as I mentioned before, Our intention is to very closely monitor our shipments in the weeks months to come to have a healthy level of inventory.
But it's fair to say that healthy level of inventory means probably even more agility than in normal times to be As flexible and fast as possible to as well seize recovery when it happens.
Thank you.
Welcome. Next question is from the line of Lawrence Wyatt from Barclays.
Hi. Good morning, Helen. Good morning, Julia. Thanks very much for the questions. 3 from me, if that's okay.
Firstly, on China, it looks like an extraordinarily positive performance. Just wondering, previously you said you didn't think you'd get much Benefit from the later Chinese New Year, and you thought you'd get all that benefit last quarter. Just wondering if anything changed there and whether anything came through In the more recent quarter to potentially boost those Chinese figures, I think it looks on my numbers to be potentially north of 200% growth in China in the quarter. I was wondering if you got if you think that was an underlying improvement in the Chinese market or if there was a little bit of a boost from Chinese New Year in the quarter. Secondly, with the U.
S. Performance being pretty strong in the off trade, just wondering how much boost you think came from Government stimulus packages or whether there you think that's much more of an underlying growth in the U. S. Consumer? And finally, on travel retail, now we're starting to Comp, the travel retail losses, particularly in Asia.
Just wondering whether that is cannibalizing the off Trade sales in Asia and your experience, particularly in China. If you can comment on travel retail versus off trade in the markets where we're starting to comp the COVID issues. Thank you.
Okay. So I'll start with China and Chinese New Year timing. So Honestly, what we can say is that we had an excellent performance, and the underlying trends are excellent. You rightly mentioned triple digit growth, 1st in China in that quarter. And I would say it's really depletion driven, so No significant CNY phasing, I would say, in those figures.
So again, trade is Fully reopened and functional in China. For Martell, all our channels, both on and off, are growing double digit Yes, it's fiscal year 'twenty. And by the way, all channels are above actual 'nineteen levels. I mean, update some, let's say, these only of KTVs and traditional of trade that are So you're still slightly behind at 2019, but all other channels and globally all on and off are above that 2019 level. So it's a very good performance for us.
U. S. Stimulus, that's I mean, based on this one, no Good luck, good demonstration that this has an impact on the off grid dynamism, but it looks like it's likely to obviously Support the consumer purchase, knowing that When you look at some states where the unemployment rate was quite high, the off trade was still quite dynamic. And so I would say It's probably obviously helping. On Travel Retail, your question was I mean, first, your comments on the fact that we're going to lap Easy comp is obviously quite right.
Then Your question on cannibalization of travel retail versus soft trade, I would say first that in some domestic markets, We are probably benefiting from the disruption of the travel retail on our domestic performance. It's quite difficult to quantify, but this is quite, let's say, reasonable to assume. And then when it comes to cannibalization from the travel retail versus the off trade, I guess your question could be as well on the Duty free offshore opportunity duty free offshore island opportunity I was referring to. And this is obviously something we are very closely monitoring Be sure that there is no cannibalization and protecting our, let's say, profitability pool both in those islands and in domestic markets.
Our next question is from the line of Olivier Nicolai from Goldman Sachs.
And Julia, I've got 3 questions, please. Just first to follow-up on Jameson in the U. S. I was wondering Why do you think the growth is slowing? Is it just tough comps and obviously the launch of Cobreu last year?
Or The fact that the brand is fully penetrated in the U. S. Second question is actually just could you give us an update on e commerce growth and How much of your sales it is today? And just lastly, a follow-up on one of the slides in the presentation. Could you just remind us What's the weight of Turkey as a percentage of your group sales?
And with the very high inflation in the country, do you see really any volumes growth? Or is your sales growth just driven by pricing. Thank you very much.
Jensson, I'm sorry, I'm probably going to repeat myself a bit, but There's 2 or let's say, 3 factors to take into consideration. 1st, the comparable basis of last year with the launch of Gogu and PantryLobe, which is one of the explanation for some slowdown We'll be set up numbers. Number 2, the on trade is still very disrupted, And Jameson is very exposed to that channel. So that means that would be my third point that there is obviously some strong Investments behind Jameson to be sure that we are capturing the reopening of the on trade and the rebound for the brand In the months weeks months to come, this is a very strategic brand for us in the U. S.
As you know. We've been Investing significantly behind that brand, especially in media, where we had double our investments in the recent past. So this is, again, a top priority for us. On the e commerce, the picture is obviously not changing dramatically From one quarter to the other, we gave you some, I think, quite precise numbers in the H1 communication for our performance by the market. So I would suggest that you could refer to that.
And knowing that It's less than 5% of our sales group level, growing obviously very dynamically In the relevant markets, growing very fast, for instance, as well in China when it starts to become quite Sizable. Your last question on Turkey. So it's close to 1% of the group sales. Okay. And the performance is quite strong.
So It's both, I would say, volume and value.
Okay. Thank you very much.
You're welcome.
The next question is from Mitra Chawley from Goldman Sachs.
Bing, two questions, please. I know on A and P, you said circa 16%. Is there a scope for that to get back to the 16.5% you had in F 'nineteen? Is it still quite difficult to find good avenues To invest A and P. I know you just said you're going to invest behind Jameson, but a bit of color on A and P would be useful.
And then a question on a couple of brands we don't talk about very much, but you mentioned Kahlua, Passport and Ramazzotti doing double digit growth. You able to give a bit of context on what's driving the strong growth for those smaller brands?
Okay. So I start with the E and P. So circa 16% is That's dramatically different for the 16.5% that you were referring to. What we want to do is drive As much impact and efficiency that we can with our A and P investments, which is obviously quite significant numbers In terms of money and that's behind our brands, so in this circa 16%, They've very strong prioritization, meaning that the ratio is stronger than that Strategic international brands and could be significantly stronger for some of our strategic priorities. So I would say for us what really matters is to keep building very consistent investment behind our brands to have very strong equity for those brands to obviously deliver premiumization strategy moving forward.
So Then your question was on ability to reinvest and an initiative where we can effectively reinvest behind our brands. As mentioned before, we are, I would say, extremely pragmatic. We want to be very agile in our resource allocation, meaning that we have the ability to accelerate our investment very quickly Depending on the denapism of the market. So you can assume that right now we have this volatility With the reopening of the on trade, which could be very different from one country to the other, this is something on which we are spending Quite significant of time with our markets to really adjust our resource allocation in the most efficient way. When you mentioned Calua, Passport and Ramazzotti.
So I would say first, Calua is not a small brand. The others are not small either. So Calaway has been performing quite strongly, especially as well in the U. S. For sometimes now, it's obviously fitting very well The home consumption and the homemade cocktails trends because as you know, Caluard It's a great ingredient for many copier recipes.
So we are very happy with the performance of the brand. And I would say on passport and romeziq, it's a strong government as well. Romeziq being quite Strong in Germany, right? It's a key market with as well a strong innovation pipeline. Thank you.
Operator, we'll take our final two callers, please.
Thank you. The next question is from the line of Trevor Stirling from Bernstein.
And then Julia, two quick questions from my side. Then first, you commented on double digit depletion growth in China over Chinese New Year. And I wonder if you could just give us a little more color about The relative strength of noublige, Colombrue, XO and also You think you've gained share over Chinese New Year? And the second question On agave pricing, I think it's something we've been talking about for some time that agave prices are very high, everybody expects them to come down eventually. Any sign that agave prices are starting to soften?
Yes. Okay. So Let me start by the question on the Marcell performance. So I'm not going to give you the exact performance by quality. But I mean the performance has been extremely strong.
All the Martell family, I would say, no bleach, Grand Blanc, and it's so And this time, Chiomi. It's very strong, double digit growth for all those Products and SKUs, and it's even stronger for Cobre, so which has driven a positive mix. In terms of market share performance, we don't honestly assess that on a few weeks basis. We prefer to do that on a Full year basis, again, we believe we had an excellent change in But there is some indication that this plateau is going to happen sooner than later.
Thank you very much, Helane.
Next question is from Tobey McMillan from Societe Generale.
Hi, there. Thanks for letting me slip in just at the end there. I guess coming back on the U. S. On off trade dynamics.
It is quite soon to comment, as you said in your answers so far, on some of the month to month Trends. But perhaps take a step back, a bigger picture, longer term view. Given that what's happened in the U. S. Market over the past year or so, do you think there's anything structural that has changed about the market, about the longer term market growth rates.
And I suppose that question would be about either total alcohol, which has had a very good 12 months in terms of consumption or specifically spirits within beverage alcohol. So how has your view of the long term growth characteristics of that market changed at all?
Yes. Thank you. So I think you rightly summarized it. The market is still very dynamic, above its long term Trend, which in all due is probably around plus 4%. And this is obviously a combination of very different trends depending On the channel and the state, so off trade is slowing down in Q3, and especially in the recent weeks with the start of the Latvian pantry loading, the on trade is clearly accelerating and reopening as we speak.
So we need to have a bit more visibility in the weeks to come. And as you said, the market globally is Continuing to be driven by spirits taking share from other beverages. So that's where we stand. Giving you a more long term view is It's a difficult exercise, so I'm not going to do that. It's fair to assume that There could be some softening in the global market dynamism once we have, let's say, It's obviously too early to say so.
Right now, it's probably around plus 7%. And our view is that it could be normalizing to the long term trends I was mentioning before.
Thanks very much.
Thank you very much, ladies and gentlemen, And thank you, Helene, and we wish you all to a good day, and mainly please stay safe over the coming months. Thank you.
Talk to you soon.
Thank you. That concludes our conference for today. You may all disconnect. Thank you all for participating.