Suntory Global Spirits’ Post

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My thoughts, as they develop, on Pernod Ricard's new recommended corporate strategy and how much the Seagram connection helps. #PernodRicard #BrandStrategy #Seagram #CorporateBrand #Diageo

Why Is Heineken Investing in Hard Seltzer Brand Stelz? Uncover the Strategic Acquisition #Heineken #Stelz #HardSeltzer #StrategicAcquisition #BeverageIndustry #MarketGrowth #DrinkTrends #SeltzerMarket #IndustryInsights #InnovativeDrinks

Diageo lost market share in 70% of its portfolio in the six months to the end of December 2023. However, the business will not resort to leaning on price promotions to drive “short-term” share growth at the expense of brand equity, its CEO Debra Crew said. Driving market share growth has been outlined as a key priority for Diageo as it reported falling sales in the first half of its financial year. The drinks company is clear, however, that it will not pursue “short-term” share if it comes at the expense of brand equity. #diageo #marketshare #brandequity #growth #kpis #strategicinsights #strategicgrowth John Davey Andy Crawford Robert FLAVIN Robin McGhee David Deeley Brian Short Bourcard Nesin Jim Watson Stephen Rannekleiv Francois Sonneville Lars Jensen Jean Noel Ortal John Craven Carol Dunne Sheelagh Pentony Gwyneth Kelly Paul Villis Mark Ritson Nina Riggins Will Keating

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🤔Ever wonder about the origins of your favorite #whisky, #gin, #tequila or #vodka❓ It's likely from Diageo or Pernod Ricard, the leaders in the spirits business known for their extensive brand portfolios built via M&A. 🥃 DIAGEO was established in 1997 through the merger of Guinness and Grand Metropolitan. 🍸 PERNOD RICARD emerged from the 1975 merger of Pernod Fils (dating back to 1872) and Ricard (from the 1930s), the two leading French producers of aniseed-flavored aperitifs. 🔸#Finances for 2023🔸 💰 Revenue: Diageo's revenue (💲21.7B) surpasses Pernod Ricard's (💲13.4B) by 60%. 📈 Growth Rate: Over the past five years, Diageo's growth (6.25% CAGR) has outpaced Pernod Ricard's (5.25%). 💵 Net Income: Diageo generates double the net income of Pernod Ricard: 💲4.7B vs. 💲2.5B. 📊 Gross Margin: Both companies maintain a very healthy gross margin of 60%. 👥 Employees: Diageo (30k employees) has 50% more staff than Pernod Ricard (20k). 🔸#ProductMix🔸 🥃 Whisky Dominance: Diageo is notably strong in whisky, accounting for 37% of its revenue. Other significant categories include beer (15%), tequila (12%), and vodka (9%). 🍹 Top Sellers for Pernod: Pernod Ricard highlights Absolut Vodka (12.7M cases), Jameson (10.7M), and Ballantine's (8.8M) as top sellers. 🔸#MarketPresence🔸 🗽Diageo's largest market is the US, with a sales breakdown of 39% North America, 21% Europe, 19% Asia Pacific, 11% LatAm, and 10% Africa. 🏯Pernod Ricard shows particular strength in Asia, especially India, with revenue distribution of 27% America, 27% Europe, and 42% Asia (plus rest of the world). 🔸#Advertising🔸 📢 In 2023, Diageo allocated 18% of its revenue to advertising (💲3.83B). 🎯 Pernod Ricard spent a more efficient 16% (💲2.1B) on advertising. 🔸#MarketOverview🔸 💹 Global Market Value: The global alcohol market's retail sales value stands at 💲1.17 trillion. 📊 The alcohol beverage market has seen a 4% CAGR over the past five years, with spirits growing at a faster 6% CAGR. 💎 A shift towards premiumization is evident, with 27% of Diageo's sales being super premium (up from 18% five years ago) and 63% being premium or super premium. Notably, Johnnie Walker Black Label grew 16% last year. 🔸#Comparison with AB InBev🔸 🆚 Anheuser-Busch InBev (maker of Bud, Corona, Stella Artois, etc...) boasts a market cap 50% greater than Diageo's and 3✖️that of Pernod Ricard's, with nearly double the combined revenue of Diageo and Pernod (💲59B vs. 💲35B) but only 15% more net profit (💲5.3B net profit) than Diageo. 🔄 Profitability & Growth: Diageo's profitability is attributed to similar % gross margins but significantly fewer employees (154k for Anheuser-Busch InBev vs. 30k for Diageo). As you can imagine it is a lot more efficient distributing $30 whisky bottles than cans of beer. 🏆Diageo's growth rate (6.25% CAGR) is three times faster than Anheuser-Busch InBev's (2.25% CAGR) over the past five years.

Diageo Exploring The Sale Of Some Non-Core Brands Diageo is reported to be working on plans to sell a trio of its non-core brands, including the popular summer drink Pimm’s. According to Sky News, the company has hired bankers at Rothschild to explore whether to sell Pimm’s, which it acquired in 1997 as part of the tie-up between Grand Metropolitan and Guinness which led to the formation of Diageo. The report quotes insiders as saying the process is at an early stage, and may not lead to the British company offloading the Pimm’s brand. The company does not break down sales data by individual brands, but industry sources said that Pimm’s was likely to draw interest from other drinks companies as well as financial investors. Alongside Pimm’s, Diageo is said to be exploring the sale of Safari, a fruit liqueur, and Pampero, a rum brand. The Sky News report noted that it was unclear whether the company would countenance selling the brands separately or whether it was only interested in offers for all three. The potential disposal of the non-core brands from its portfolio of 200 products comes at a challenging time for Diageo and its relatively new Chief Executive, Debra Crew. Its share price has tumbled after a torrid few months in the wake of a profit warning in November which was blamed on weak sales of Scotch whiskey in Latin America and the Caribbean. Those markets collectively account for roughly a quarter of Diageo’s global whisky sales, with that category in turn representing about 25% of the group’s overall revenues. Last month, the company said a “perfect storm” of overstocking and slowing demand had combined to depress profits. Crew, who only took over in June last year following the death of predecessor Sir Ivan Menezes, has pledged to get the business performing again, declaring herself “restless” to improve its fortunes. NamNews subscribers, see latest NamNews items, Link in comments below NamNews Implications: * Large company’s non-core lines can be highly significant acquisitions for medium and smaller-sized companies… * …that tend to drive their new acquisition very hard, in part to justify the purchase price. * Rivals will monitor this initiative… * …or even make a bid. * Either way, anticipate change in the category. #Diageo #Pimms

Lewis Hamilton didn’t win today’s F1 race but he is winning off the race track. Last week, it was announced that Pernod Ricard had acquired a minority stake in Lewis Hamilton’s non-alcoholic agave brand ALMAVE. Tequila has always been Lewis Hamilton’s drink of choice. But he wanted an alternative that allowed him to live a busy life without restraint. He quickly realized there was a gap in the market and joined forces with Casa Lumbre, a best-in-class Mexican spirits innovator, to create an authentic product that follows and respects the traditional process and craftsmanship of tequila in a non-alcoholic form. It led to the launch of ALMAVE in 2023, a non-alcoholic agave. Like tequila, Almave is made from the same raw materials in the same part of Mexico, but it skips the fermentation process, turning the liquid into alcohol. It allows drinkers to enjoy tequila’s fresh and distinct agave taste and character without alcohol. This also fits Hamilton’s lifestyle, as the Seven-Time Formula One™ World Champion can’t be drinking and driving. Last week, Pernod Ricard announced that it had acquired a minority stake in Almave, aiming to take the brand to “several markets” globally. Pernod Ricard is a worldwide leader in the spirits and wine industry. It blends traditional craftsmanship, state-of-the-art brand development, and global distribution technologies. Their portfolio includes Absolut vodka, Royal Salute, Jameson Irish whiskey, Havana Club rum, and many more. Hamilton said: “It’s exciting that Pernod Ricard has, today, become an official stakeholder in Almave, allowing us to unleash the potential of the next stage of our journey and help take Almave to even more people worldwide.” “Agave is a highly sought-after category worldwide,” Pernod Ricard chairman and CEO Alexandre Ricard said. “Having a non-alc proposition in our premium portfolio that pays full tribute to the craft and savoir-faire of its traditional distillation makes it a true gem. I’m very excited to see Pernod Ricard support the development and fulfill the true potential of Almave.” While Hamilton is nearing the end of his Formula One career, he is already embarking on new journeys. Besides launching his brands, he is also an investor in several other startups. Do you think he can win one more Formula One title at Ferrari?

If you had any doubts about the staying power of the non-alc category, the latest moves from strategics will change your mind. In just the last 60 days, we’ve seen some exciting developments: ✅ Diageo acquired Ritual Zero Proof ✅ Pernod Ricard invested in Almavé Tequila ✅ LVMH backed French Bloom As the CEO of a non-alc brand, it’s incredible to see these major players doing more than just paying attention—they’re placing meaningful bets, signaling that the category is real and here to stay. Of course, those of us building in this space have always believed that 😉.. but now we’re seeing it reflected across the entire value chain. Retailers like Sprouts, Target, and Total Wine are expanding their commitment to non-alc by carving out prime shelf space. Investors are solidifying their theses, and now the strategics are stepping in. The proof is in the pudding. These moves—whether it’s investment or increased shelf space—are all a reflection of growing consumer demand. It’s an exciting time to be part of this movement, and the momentum is only building from here! #NonAlc #BeverageIndustry

Can David Beat Goliath in Spirits? How Nemiroff Achieved a 41.7% Growth in a Red Ocean Market 🚀 I’m thrilled to share some incredible news: Nemiroff has been recognized as one of the fastest-growing spirits brands worldwide, securing a spot in the TOP-10 by The Spirits Business with an astounding 41.7% growth last year! 🏆🌟 This achievement isn’t just about numbers; it’s a testament to the power of strategic marketing and human-centred brand management. Here are the key learnings from our journey that you can apply to your business: 1️⃣ Set Ambitious Goals: Aim high and pursue relentlessly. Bold ambitions drive extraordinary results. 2️⃣ Embrace Change: The spirits industry is dynamic. Stay agile and adapt your marketing strategies to market trends for sustained growth. 3️⃣ Leverage Local Roots Globally: Maintain a strong local identity while expanding globally. This dual approach can resonate deeply with diverse markets. 4️⃣ Team Spirit: Diverse talented team can achieve incredible breakthroughs. 5️⃣ Embrace Disruption: Constantly refine your products and marketing campaigns to stay ahead of the competition and connect with consumers. 6️⃣ Consumer-Centric Approach: Understand and cater to local tastes while maintaining a global brand identity. This helps in expanding market presence effectively. 7️⃣ Craft Brand Stories: Craft compelling stories around your brand. Emotional connections drive loyalty and engagement. 8️⃣ Strategic Partnerships: Build strong relationships with key stakeholders and partners. They can provide invaluable support and open new opportunities. Originating from Ukraine, where we proudly hold the title of #1 vodka brand 🏆, Nemiroff’s influence has expanded globally. We’ve made significant strides in Europe, the Middle East, and Asia, becoming the leading vodka in many countries and solidifying our presence in duty-free markets worldwide. This is just the beginning. We’re excited about the future and are committed to continuing our journey of growth and excellence. Cheers to all who have been part of this incredible journey! 🥂🌏 If you’re passionate about marketing innovation, brand growth, and the spirits industry, let’s connect! Follow my journey and join the conversation about building a world-class brand. #marketing #CMO #brandbuilding #indomitablespirit #changemanagement