Drinks industry looks for Absolut transition
Pernod Ricard SA (PERP.PA: Quote, Profile, Research), the soon-to-be owner of Absolut vodka, faces challenges for the prestige brand as upstarts keep edging for a slice of the largest, booming sector of the liquor market.
Pernod USA Chief Executive Alain Barbet said last week in New York it was too early to give specific plans for the brand, since the costly $8.9 billion (5.63 billion euro) acquisition has yet to be made final.
But Barbet told Reuters in an e-mail exchange that the French company plans to apply its experience in launching higher-end versions of its drinks, such as Chivas Regal 25 Year Old scotch and Jameson Rarest Vintage Reserve whiskey.
U.S. competition is fierce: at least 59 new kinds of vodka hit shelves last year after at least 60 the year before.
Pernod needs to keep Absolut fresh, especially for younger drinkers who may have missed its iconic ad campaign that began in 1980 featuring a haloed bottle and the words “Absolut Perfection.”
“Absolut has been holding its own for a long time now,” said Eric Schmidt, research director for Beverage Information Group, a market research firm specializing in the alcoholic drinks industry free credit report online. He forecast continued growth for Absolut, helped by a new ad campaign.
Sales of vodka, the biggest spirits segment, rose 6.7 percent to 52.7 million cases last year, while whiskey only grew 0.2 percent to 45 million cases, Schmidt said.
“They didn’t pay an outrageous price for this,” Schmidt said of Pernod’s bid, which was 27 percent higher than the high end of analysts’ estimates and beat out three other suitors.