PERNOD RICARD SAYS THE DRINKS MARKET IS SOFTENING AFTER A STRONG 18% RISE
France-based global wine and spirits maker Pernod Ricard saw very strong sales in the first nine months of its fiscal year 2022, but has warned that the global environment remains volatile and could impact its final quarter, ending June 2022.
In the nine months to March, sales were up by 18% reaching €8.41 billion, with an acceleration in Q3 to 20% (all percentages are organic, not reported). Among its key markets, India maintained strong growth at 19%, with the USA at 13%, while China at 12% was impacted by its Covid-19 resurgence but also a high comparison basis from the same period last year.
Although growth was described as “excellent” in Europe, Pernod Ricard saw some deceleration in March due to impacts of the war in Ukraine which will continue. Other regions like Latin America, Africa, the Middle East and Asia (notably Korea and Japan) were also strong, while the travel retail channel was up by 33% as passenger traffic rose outside China.
Big brands are in demand
In line with pandemic trends, Pernod Ricard’s strategic international brands did a lot of the legwork, up 20% driven by Jameson, Martell, Chivas Regal, Absolut, Ballantine’s and The Glenlivet, thought the company speciality/niche portfolio did even better with 28% growth.
CEO Alexandre Ricard said a statement: “Our Q3 continues the broad-based performance we enjoyed in the first half, with all our regions and must-win markets showing very strong growth.” However a note of caution was struck when he added: “The global environment remains volatile with an increasingly challenging and inflationary context. We expect a softer Q4 impacted by Covid disruptions in China, phasing normalisation in the US, and conflict in Ukraine.”
Pernod Ricard is expecting its channel sales to diversify again across regions due to a post-pandemic on-trade rebound, while off-trade resilience continues, plus a recovery in travel retail as more people travel and shop.