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Marketing Week (MW): How good is the drinks industry at collecting and using data?
Martin Riley (MR): We’re probably not in the lead. Clearly, if you’re a retailer, hotelier or someone who faces consumers, you have access to direct data. We go through third parties, bars and shops, so there’s a real opportunity for us when we do interface directly with consumers to begin that process and build the relationship. If you compare the drinks industry with the frontline, consumer-facing companies, I don’t think any of us compare.
MW: Nike has brought its social media team in-house. Is social media handled internally at Pernod Ricard or is it outsourced?
MR: We prefer to have social media teams in-house. We have a small social media team at the Holding [the head office in Paris], which is part of my group, but increasingly the big affiliates and brand companies also have teams internally. It’s something we need to be able to control.
If you want to have a conversation with a brand like Glenlivet [malt whisky], you want to talk to the guy in Scotland who is making it. We have a programme called the Glenlivet Guardians [a members-only group that has access to private tastings, limited edition releases and events], who are passionate about the malt whisky.
People who drink single malts generally know a lot about the subject so they want real information. It’s very similar to wine in that sense, so I don’t think you can put an agency person on it. I can really understand why Nike has made that move.
MW: How do you measure performance considering the structure of the business?
MR: The market and brand companies [see Group Structure, page 18] have specific financial targets which everything is built around. The markets have a target given by the regions and the regions have a target given by the Holding [the company’s Paris head office]. Brand companies also have a target given by the Holding.
A brand company like Havana Club, for example, goes to Germany, which happens to be a very big market, and looks at what initiatives they can develop together and what they can generate in terms of financial results for both the market and the brand company. It’s all transparent, and they have to work together so they can both meet their targets.
The financial discipline, as in most French companies, is very strong. But it’s not short term at the expense of long term – that’s the determining factor. We use tools to measure long-term brand equity, as well as short-term performance – it’s about balancing the two.
That’s effectively what the whole management process is about. Within that you have to recognise that some markets are better performers than others, some are more mature and some are emerging, so what you do in each case may be different, but they all have their financial targets to meet.
MW: How do you find the right balance between promoting a brand and the need to promote responsible drinking?
MR: We take it very seriously. From a marketing point of view it’s essential. It’s the thing we have to pay most attention to. We’re not an FMCG company. We are not selling toothpaste, we are selling strong spirits and wines, so we have to be responsible.
We have internal controls and an internal panel that looks at all promotional and advertising activity and communication before it goes out to make sure it is compliant with our own rules as well as external regulations, like the Portman Group in the UK, which determines what you should and shouldn’t do to remain responsible.
The group has an annual company-wide responsibility day. It involves all 18,000 employees around the world devoting themselves to responsible drinking and taking pledges that they are going to do something to encourage the prevention of drink-driving and over-consumption, or educate younger people about drinking in moderation.
MW: What does the rise of digital platforms mean in terms of staffing?
MR: It will have an increasing effect on the structure because we want digital to be absorbed into the brand teams. It’s happening at a different pace in different countries and because of our decentralised nature, some of them are moving more quickly than others.
A lot of digital people we’ve brought in have a goal of being in brand management. They’ve come in because we need to inject expertise into different parts of the organisation quickly, but they don’t want to stay, and we don’t want them to stay only as digital experts if they have the ambition and capability to become brand managers and beyond.