Pernod Ricard to tackle UK sales dip with innovation drive

Pernod Ricard is readying a raft of marketing activity to back its premiumisation strategy as it looks to reverse a decline in its UK sales.

PernodRicardpic

The Absolut and Jacob’s Creek maker saw sales drop in the UK by 4% year-on-year during the three months to March 2012.

Pernod Ricard has mapped out a long-term marketing strategy to get shoppers to upgrade from standard brands.

Last month, it launched a ‘Building Premium Wine Brands’ initiative for its wine brands such as Jacob’s Creek and Bancroft Estate after research it commissioned revealed that more than half (58%) of consumers are wiling to trade up to premium wines.

The business said that ‘sustained marketing innovation’ remained at the “heart of the premiumisation strategy.”

It is planning to step up investment in its brands this summer with a series of planned promotions including the launch of a Malibu & Cloudy Lemonade can in May and the release of a film funded by its Havana Club brand later in the year.

Pernod Ricard’s UK arm recently announced plans to expand its Jacob’s Creek brand into wine cocktails in a bid to arrest declining sales across the category.

Sales of wine and spirits across retail outlets continue to fall in the UK, according to the Wine and Spirits Trade Association (WSTA) latest Market Report. It revealed that volume sales of wine in the off-trade were down 2% for the year to 4 February.

Globally, sales rose to  €1.7bn (£1.4bn) from  €1.62bn (£1.3bn), a 5% increase year-on-year compared to the 8% rise it predicted in February.

The company’s revenue was boosted by sales in emerging markets such as China and Brazil as well as a recovery in the US, despite a weaker performance in Western Europe.

UPDATE

Denis O’Flynn, deputy managing director at Pernod Ricard UK, says despite the dip in the last quarter the company will continue to back its premiumisation strategy to drive revenue.

He adds: “Premium is a major opportunity for the industry and we remain fully committed to driving it. Light wine volume has plateaued over the last three years and is currently in marginal decline, as is household penetration – as a result, a new source of sales value growth is needed. Premium wine is currently the fastest-growing segment by value in the UK and has delivered an 8% increase in average price, compared to just 4% in lower mass wine.

“The outlook is similar for premium spirits – the category is large, growing and resilient, even in tough economic conditions. Premium spirits are growing ahead of total spirits and account for 20% of all spirits sales – that’s £1 in every £5 spent on spirits.”

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