Subscriber login Close [x]
remember me
You are not logged in.

Pernod Ricard plugs Scotch growth back into NPD with new launch

Published:  30 August, 2018

Pernod Ricard is capitalising on encouraging growth in the Scotch category with the launch of its new Chivas XV.

The 15-year-old blend is aged in Cognac casks from Grand Champagne – the top tier of Cognac’s six crus.

Although, it is unclear how long it is aged in cask, or if it was aged exclusively in barrels previously used to age Martell, also owned by Pernod.

FY18 saw 3% growth in Pernod Ricard’s Scotch portfolio compared to flat growth in FY17, as well as a return to growth for Chivas (+5%).

Pernod Ricard puts this rebound in the Scotch category partly down to the rise in premium spirits, which surged £391m at the company (a mixture of on and off-trade) over the past two years.

Innovation is also behind a "strong" set of results for the 2017/18 fiscal year, released yesterday, with NPD accounting for 75% of the company’s overall growth.

This includes Chivas Extra, which sold 268k cases in over 90 markets last year - an increase of 131% since its launch 2015.

“Our Scotch business is accelerating,” said Jean-Christophe Coutures, the new Chivas Brothers’ chairman and CEO, who also confirmed large sums are being re-invested into the category. “100% of the margin from new products is going back into NPD, and the £50m going into the expansion of our bottling facility in Kilmalid marks a new era for Scotch.”

The Glenlivet, Ballatine's and Chivas each grew by 5% in value in 2017.

Ballatine's also reached a milestone 7m 9-litre cases.

The only Scotch that underperformed was Royal Salute, which was 2% down on the previous year.

Pernod is now pushing Royal Salute in its global travel retail division, focusing on key airports and luxury markets in Asia.

The rise of the Scotch category ties into an overall focus on premiumisation trends at the company, which grew its overall sales by 6% in FY18, compared to 3.6% the year before, beating its projections.

“The aperitif moment is growing,” said chairman and CEO Alexandre Ricard. “Premiumisation and luxury is growing. Le Cercle, [the company’s luxury portfolio] is also growing by 10%. Three years ago, we were very clear that we would reach top line growth of between 4% and 5%, and we believed this growth would come from diversified sources.”

Ricard also fielded comments on Brexit.

As one of the biggest exporters of Scotch, Ricard said the company founded by his grandfather would benefit from being able to plan ahead, but that the “outcome probability [of a hard or soft Brexit] changes everyday”.

He said investment in the UK market would continue regardless of either scenario.

Chivas XV will be available to the trade in October.