Pernod Ricard pushing media investment behind Jacob’s Creek in an effort to halt declining sales

Pernod Ricard is facing challenges with one of its flagship wine brands, Jacob’s Creek, as the volume of discounting in the wine category is drowning out its premium price positioning. While others in the Australian wine category are experiencing growth, the drinks maker is looking to turn around Jacob’s Creek’s declining sales by pushing media investment into the brand.

The company’s latest sales figures for the first half of its financial year showed that its premium wines had declined by 2%, largely driven by poor performance of its Australian wine brand, Jacob’s Creek, in the UK and China.

However, Nielsen data cited by competitor Accolade Wines for the 12 weeks to 3 January showed that the Australian wine category had grown by 1.8% year on year in terms of volume, and 2% in terms of value sales.

Pernod Ricard’s results also showed that it saw 10% value growth and 11% volume growth in total off-trade wine in the first half of the year, compared to -1% and -2% for the total market, suggesting Jacob’s Creek is alone in its struggles.

The company is keen to stress the brand’s premium heritage and will continue to do so despite a commoditised market led by discounting.

Speaking about Jacob’s Creek and the wine category at a roundtable event in London today (16 February) Pernod Ricard’s CEO Alexandre Ricard said: “There’s a lot of growth in the category driven by deep price discounting. We’re continuing to invest in Jacob’s Creek as a premium Australian wine, but we need to justify the price premium.”

In an effort to turn around the brand and justify its premium price positioning, the company launched its “Made By Australia” brand campaign for Jacob’s Creek earlier this month.

The multi-million pound global campaign looks to celebrate the brand’s quality and history, which dates back to 1847, through a 30-second TV spot as well as digital, social and consumer PR activity. The brand has also teamed up with tennis star Novak Djokovic for a campaign surrounding its sponsorship of the Australian Open as well as activation to come around The Championships at Wimbledon.

The company is looking to keep up with competitor brands in the UK such as Hardy’s, Blossom Hill, Echo Falls, Gallo and Isla Negra.

Hardy’s is the biggest wine brand in the UK according to a report in The Grocer last July, with Blossom Hill coming in second.

Meanwhile, Pernod Ricard claims that its Campo Viejo brand is the number one selling branded red wine in the UK, while its Brancott Estate brand is the number one selling branded New Zealand wine.

However, Pernod Ricard still has a long way to go to take advantage of the forecasted uptake in wine drinking in the UK.

Guillaume Deglise, CEO of wine exhibition Vinexpo, said: “We can say confidently that 2015 will show that the UK wine recession is over…The UK wine trade is building value and many leading marketers report progress at the premium end.”