Spotlight On: Pernod Ricard USA

With iconic brands like Absolut, Jameson and Malibu, Pernod Ricard USA plans to lift the spirits of grocery retailers.

There continues to be great opportunity for the grocery channel to make some big money from the spirits category while continuing to gain market share.

Retail spending on spirits has grown 67% over the last decade, outpacing growth in both beer and wine. According to AC Nielsen, spirits sales in the grocery channel have grown 4% in value in the last year. The top 25 brands deliver 50% of the sales and 67% of the growth—Pernod Ricard has three of those brands, Absolut, Jameson and Malibu.

There is little doubt that supermarket retailers are intrigued with the growing spirits segment. Besides offering excellent margins, turns and profits, spirits can help grocery retailers satisfy their shoppers’ desires and increase trips and basket ring. As mixology moves into the mainstream shoppers are looking to bring the on premise experience home and are looking for entertaining solutions.

Pernod Ricard USA, which produces and markets such leading brands as Absolut Vodka, Jameson Irish whiskey, Malibu rum and The Glenlivet single malt scotch to name a few, may be in the perfect position to assist retailers to continue to take advantage of the growing spirits segment.

“We are focused on building brands of desire,” says Mitch Cristol, director of trade marketing for the New York-based company. “To accomplish this, we must know our consumers well, communicate with them effectively and create the brands, products and experiences they want. We are committed to working with our retail partners to deliver on our shoppers’ taste, needs and interests.

“We have a portfolio of iconic and leading brands that can help retailers meet their sales and profit goals,” says Cristol. “Our job is to work with our retailer partners to deliver relevant programing and merchandising solutions that drive sales.”

There is a lot to say about the spirits market and how it can help the grocery channel. Grocery represents 15% of spirt purchase store trips; there is an opportunity for the grocery channel to increase their share of store trips and spirit purchases by cross promoting spirits with other grocery items and eliminating the shopper’s need to make a second stop. Cristol is quick to point out cross merchandising plays a very large role in driving basket size. Backing that up, he refers to a study that found that 57% of shoppers buying spirits at a supermarket also purchase groceries on the same trip and 52% of spirits shoppers in grocery stores are open to ideas and can be influenced by cocktail and serving suggestions, promotional and in-store experiences that lead to impulse purchase.

“Executing spirits displays in the TAB department is fantastic,” Cristol says. “But out-of-department displays can help spur the impulse sales that will really make a difference for retailers. For example, displaying Absolut and Kahlua in the dairy department takes advantage of the classic cocktail trend with the White Russian and will drive sales of both Absolut/Kahlua and cream. Creating a summer display for Jameson in the meat section is ideal for those consumers who are looking for products for summer BBQ occasions. Building a Malibu summer essentials Beach House display offers consumers a one-stop shop for all their summer needs.”

That means to maximize the success of spirits, grocery retailers need to cross-promote it with everything from soda and chips to meat and produce—virtually any category in the store to deliver true entertaining solutions. Retailers also need to promote the fact that they sell these products where possible, via in-store displays, signage, circulars and most importantly digital. Cristol says that about 60% of purchase decisions are made prior to the shopper entering the store. “It is imperative that we are effectively communicating with shoppers before their shopping trip begins,” he adds.

With all that said, “We cannot forget about the shelf,” says Cristol. According to recent studies, 77% of spirts purchases come from the shelf and how the shelf is merchandised directly affects the success of the spirits category. Stocking the brands shoppers are looking for in the sizes and flavors they desire is key, but there is a balance between offering a selection without tying up valuable real estate with items that do not turn. Making the shelf easy to navigate for shoppers is imperative, using category anchor brands like Absolut, Jameson and Malibu at eye level to build categories around will not only drive those brands sales but will help drive the entire category, says Cristol.

Pernod Ricard USA is certainly not resting on its laurels either. Despite having the leader in a number of spirits segments, Cristol says the company is coming out with new products on a regular basis. “Innovation is part of our DNA,” he says. “It is what keeps the engine turning here and what makes this category continue to grow.”

For example, in July the company is introducing Jameson Caskmates, which Cristol says is Jameson Irish Whiskey aged in Franciscan stout beer barrels. “Jameson Irish whiskey is perfect for shot occasions and Jameson Black Barrel for cocktail occasions. Jameson Caskmates is perfect for whisky sipping occasions,” he says. “But, to be perfectly clear, when we do introduce new products and innovations, they are done with a purpose in mind. We develop our innovations off consumer insights and specific opportunities.”

Busy days ahead

Pernod Ricard USA has big plans for many of its top brands this year. Here is a sampling of what the company is up to over the next few months:

•Absolut

This summer Absolut will be offering a Limited Edition Spark Bottle, this bottle illuminates as well as giving consumers a chance to enter to win a trip to an Epic Nightlife Experience at the Absolut House.

•Jameson

Jameson will be leading the way this St. Patrick’s Day and offering a chance to win a trip to Jameson’s Neighborhood in Ireland. The “Jameson Neighborhood Pub” as a display centerpiece engages and disrupts shoppers and encourages impulse purchase.

July Launch of Jameson Caskmates.

•Malibu

Just as Malibu is the Spirit of the Summer, the beach house is the ultimate symbol of summer fun, so this summer Malibu will bring together unforgettable flavors and experiences from around the country, under one roof. The Malibu Beach House will deliver summertime excitement that lets fans enjoy their Best Summer Ever—with the Malibu Rum Beach House promotion including cross merchandising offers on summer essentials and the opportunity to experience one of the summer’s Malibu Rum Beach House events.

•Avion

Avion is giving consumers the opportunity to experience the “World’s Best with Avion Tequila” and the opportunity to win an exclusive private Jet getaway.

•Altos Tequila

This summer Altos Tequila will be partnering with Heineken’s Beers of Mexico; giving retailers the opportunity to cross promote the two brands.

•Kahlua

The company announced the first spring/summer season limited release for Kahlua—Kahlua Salted Carmel.