Strategic wine sales are up 9% for Pernod Ricard, driven by double-digit growth of Campo Viejo and Brancott Estate, with Jacob’s Creek up 8%.
In February, the company noted that while it had seen good growth for Brancott Estate and Campo Viejo, this was “offset by softening decline in Jacob’s Creek”. However, the brand’s fortunes have turned around during COVID-19.
Total sales for Pernod Ricard for the first quarter of FY21 totalled €2,236 million, with an organic decline of 6%, resulting from the following channel dynamic:
• Off-trade remaining very resilient in the US and Europe
• Partial On-trade reopening, though channel still disrupted
• Travel Retail still being in very significant decline, in spite of some domestic travel resuming.
By geography, the company noted the following:
• Good start in the US and China, with strong shipments ahead of festive season. Sales in the country rose 4% over the three months to the end of September
• India in double-digit decline
• Good resilience in Europe, thanks to Off-trade and “staycation” over summer and strong dynamism in the UK and Germany, near stability in France, but declines in Spain and Russia.
Aside from wine, another sales highlight was specialty brands, which were up 30%, thanks in particular to Lillet, Malfy, Aberlour, Avion, Altos and Monkey 47.
However, strategic international brands were down 10%, with significant declines for Martell, Chivas and Ballantine’s, due mostly to Travel Retail, but there was continued strong growth of Malibu and The Glenlivet, and Jameson remains resilient.
The company said it expects Q2 to still be strongly impacted by COVID-19, but it expects sales to return to growth in H2.
Alexandre Ricard, Chairman and Chief Executive Officer, said: “Our first quarter is encouraging. Sales were still in decline, but the business has recovered significantly
vs. Q4 FY20, thanks to the partial reopening of the on-trade and the strong resilience of our brands in the off-trade.”
However, France and the UK have both imposed curfews on the operating hours of hospitality venues to help enforce social distancing, while Wales has gone into a two-week lockdown to curb the rise in coronavirus cases. Even Sweden is introducing voluntary lockdowns.
“We will continue to implement our strategy, in particular accelerating our digital transformation,” Ricard concluded. “We will tightly manage costs while maintaining the agility to reinvest to adjust to market opportunities.”