Pernod Ricard sees 20% ecommerce growth as it aims to expand through innovation
Pernod Ricard is hoping to expand its “fast growing” ecommerce channel through innovations and partnerships, as it looks to build on 20% sales growth and own the digital channel.
Speaking at a roundtable today discussing the alcohol company’s half year results for 2015/2016, Pernod Ricard’s CEO Alexandre Ricard told Marketing Week that despite their small size, its ecommerce channels are expanding rapidly.
Ecommerce currently accounts for 5% of sales in the UK but just 2% globally. Increasing that share is a “key pillar” for the company.
He said: “Globally speaking, ecommerce today is our fastest growing channel. It’s still small – it currently represents 2% of our business, but the last time I checked it was growing at 20%.”
Denis O’Flynn, managing director of Pernod Ricard UK, confirmed that the company is putting a bigger focus on its ecommerce platforms. Search has also become increasingly important, a move which he believes paid off over the Christmas period.
“[Ecommerce] is one of our four key platforms and we have been focusing on it more. If I look at the half we’ve just gone through, which includes the Christmas period, we’ve had 90,000 additional searches for our products,” O’Flynn told Marketing Week.
“That’s based on the whole building of the platform, ensuring that we have the right keywords in there, having the right tonality. We found that with wines and having a search word like ‘Rioja’, there are certain key linkages that you need to have there. The results for the Christmas period, small as they are, have been very positive.”
Partnerships are also key. Pernod Ricard is working with Amazon, as well as grocers including Asda and Tesco to push its digital sales.
O’Flynn explained: “We’ve engaged with pure players in terms of the on-trade for our whisky brands, and with the off-trade we’re looking more towards the Amazon space. We’ve engaged with those players, and we’re continuing to work with multiple grocers, which are probably a bit more advanced in that space.”
Using innovation to lure in millennials
Besides using innovation for its digital platforms, the company is also introducing a new range of products to get millennials on board.
In April, Pernod Ricard will roll out a range of ‘Suncraft’ wines after research by the company found that millennials found the current wine offering “confusing”.
“We’ve got five expressions – two red, two white and a rose – which are definitely designed around simplifying the messaging, and are easy to remember and recall. They will be an entry-level wine, and we’re hoping [consumers] will then trade up into the classic range and our reserve range. So we’re trying to make that journey easier for our millennial consumers,” O’Flynn said.
The company will also be launching Monkey 47, a craft gin brand that Pernod Ricard acquired in January, at some point this year. According to the company’s CEO, its increased focus on craft is “in response to growing consumer needs”.
Pernod Ricard’s half year results show that its net global sales grew 7% year on year, mainly driven by its whisky and champagne brands. However, its vodka brand Absolut is struggling, reporting a 3% decline in organic sales for the first half of 2015/2016.
