Pernod Ricard has unveiled its first set of results since putting its former finance chief in charge of brand strategy and beginning its transformation plan, which CEO Alexandre Ricard says is starting to pay off.
Speaking at its first half results this morning (12 February), Ricard told Marketing Week the results are evidence that the changes the business has made to its management team – including the appointment of Christian Porta to the newly-created role of global managing director of business development at the beginning of 2018 – are “delivering” and show it is “on the right trajectory”.
“If you look at the results, it’s going in the right direction,” Ricard said. “Now [Porta is] working alongside all brand companies to foster a lot more collaboration, a lot more focus behind the right priorities, as well as from an innovation standpoint. A year and a bit more down the road the results speak for themselves.”
Pernod Ricard, which is the world’s second-biggest distiller with brands including Jameson whiskey, Beefeater gin and Absolut vodka, has made a number of big changes to the business over the last three years.
Since Ricard took on the top job in 2015, all his top team is either new or new in their roles. The long-term aim is to enable the company to become more collaborative and speed up decision-making.
It is Pernod Ricard’s first set of half-year results since putting its three-year ‘transform and accelerate’ strategic plan into place, during which time the French business boosted sales by 5% to €5.19bn (£4.55bn).
The plan is split into two pillars: the first, which accounts for around 80% of the strategy, is called ‘more from the core’ and is centred around acceleration.
“This is basically what we do today and how we can do it even better: so promotional efficiency, time to market of innovation, luxury route to market, digital acceleration,” Ricard explained.
“Three to four years ago who would have thought we would be capable of sending half a billion touchpoint messages to 100 million consumers around the world on a weekly basis?”
The second, ‘prepare for the future’, is forward-looking and focuses on how the industry is going to transform itself over time.
“If you look at the evolution of the spirits industry over the last 100 years or so we went from selling spirits to selling brands. Today we are transforming that whole brand-to-brand experience to brand experience services we can monetise, and that’s part of transforming our business.”
Pernod Ricard is expecting sales to increase between 4% and 7% between now and 2021, with the new plan aiming to deliver additional savings of €100m (£87.7m).