Brands that are not “true to themselves” in their corporate social responsibility (CSR) activities will be found out quickly by consumers, particularly millennials, who are “information-savvy” and determined to learn about the products they consume, according to Pernod Ricard CEO Alexandre Ricard.
Ricard warned companies that consumers can sense when CSR claims are “bullshit”. He was speaking to Marketing Week ahead of a panel debate to promote The Venture, a global competition for social enterprises to win $1m funding from Pernod Ricard’s Scotch whisky brand Chivas. Panellists included model, actress and Impossible founder Lily Cole.
Can you explain The Venture and how it works?
Alexandre Ricard: It all started with the Chivas team. They went back into the history of the Chivas brand and the Chivas brothers, James and John, to get a complete knowledge of the product DNA. Part of the DNA is entrepreneurship. They also had a social impact on their community in Aberdeen. They funded schools and hospitals.
The idea behind The Venture is ‘what would James and John Chivas have done today with the power of their brand?’ They would have done something more global, because Chivas is now a global Scotch brand, for social entrepreneurship.
It is basically a call to action to aspire social entrepreneurs throughout the world that would like to present a business plan that has a positive social impact on the world. The winner or winners can share up to $1m for their project.
This year we had more than 2,500 submissions from 29 countries around the world. Of these, we have 27 that are selected, basically one per country. The second selection for the finalists takes place in July in New York.
Why is a project like this important to Pernod Ricard and the Chivas brand?
Alexandre Ricard: It’s important for a number of very clear reasons. Number one, from a corporate social responsibility point of view at Pernod Ricard it is important – and it is part of our DNA. Pernod and Ricard are two brands that were founded by entrepreneurs that had also a big social impact on their local communities.
Point number two, at brand level we don’t call it CSR, corporate social responsibility, but brand social responsibility. The new consumers, millennials, are engaged much more with brands and products that have a positive impact. They really relate to brands that have a lot of substance to what they do and that’s absolutely important.
Former BP CEO Lord Browne recently called CSR a “failed” strategy because companies only pay lip service to it. How do you ensure you don’t follow that path?
Alexandre Ricard: Very simply, by being true to ourselves. CSR is something that is new and trendy in today’s world, but for us it goes back to our roots. How many companies can say their founders were both social entrepreneurs?
I can give you many examples [of CSR at Pernod Ricard]. In 1939 during the war in France, the Vichy government prohibited overnight the distillation and sale of Pastis, which was the only product at the time which was produced by the Ricard company. That happened on the weekend and on the Monday morning my grandfather, the founder Paul Ricard, arrived at the distillery and said to his guys – 800 of them, which means 800 families: “Don’t worry. We’re no longer allowed to produce Ricard – fine. I acquired some land not far from here, in Camargue. We are going to grow rice.” He really wanted them to keep their jobs and to feed them.
That was back in 1939. In 1966 he founded the Paul Ricard Oceanographic Institute to protect the environment around the Mediterranean sea. Likewise on the Pernod side, in 1971 Jean Hémard, the CEO [of Pernod] at the time, founded an institute tackling issues with alcoholism.
Consumers dig into the substance of brands. If you’re not true to yourself, if they feel it’s ‘bullshit’, they will remember and they will know. We have the conviction that it is genuine, it is authentic, it is part of the DNA of our company.
How do you communicate stories such as this, which would be hard to tell in a 30-second ad?
Alexandre Ricard: That story, you get [from] our influencers at the end of the day. When you go to the larger public, we have our typical marketing communication platform, which is ‘Win the Right Way’, which means Chivas stands as a brand for people succeeding in life, but by doing things the right way.
That’s our platform and that is easily communicated through TV campaigns, out-of-home, print – that’s fairly straightforward. Then people go to social media, onto the website, and if they’re really interested, you can get a complete feel for what lies beneath.
We do help them make the connection. The good thing, I believe for companies and brands like Pernod Ricard and Chivas, is that our brands have history and substance, on one side, and on the other side millennials are very curious about brands. In today’s world you Google any brand and you get the information. Millennials are information-savvy. They like to know what they consume, what they hear about, and see if it’s true.
How do you ensure you are consistent with this principle in your supply chain? Does it need to filter through the whole organisation?
Alexandre Ricard: It always does. We like to call it ‘From Grain to Glass’. We like to be in control of everything from grain to glass, in terms of the grain we choose, the whole distillation process. Obviously Chivas has a home – the plant – and we fully own it. The whole mastery of distillaton is controlled as well and, from one generation, passed to another.
The whole of marketing is controlled as well, all the way down to the glass. We also have environmentally-friendly initiatives for all of our production facilities – in some we are more ahead than others but over time we are improving them all. The Absolut distillery, as far as I know, is the only carbon-neutral distillery in the world.
Why do you believe Pernod Ricard is the right organisation to fund global social enterprises, rather than governments, for example?
Alexandre Ricard: We are a business, first of all. In today’s world, every single business has a duty of giving back to society.
Businesses [also] have a business view of things. The sustainability of a given project is key. We need to make sure that any business plan of any given positive social impact project can be sustainable over time – i.e. be successful, be profitable, and that is, I think, also a big difference. The big thing there is that we are not looking to fund businesses that will never be profitable. We want sustainable propositions that can be scalable, and become huge to this world and have a positive impact – at the same time, making money.