Pernod Ricard ramps up China focus to tap high-end booze demand
PERNOD Ricard is looking to launch more exclusive products in China on bets demand for higher-end alcoholic drinks will overcome any short-term challenges from an economic slowdown.
The maker of Absolut vodka and Perrier-Jouet champagne is already making inroads in the Chinese whisky market. It opened its own distillery in Sichuan in 2021 – the first international firm to establish such an operation in the country – and started selling a 24-year-old Scottish whisky product exclusively in China last year.
Now, it’s looking to build on that presence to carve out its share of the massive consumer market, according to Jerome Cottin-Bizonne, head of Pernod Ricard’s China business.
One part of the firm’s strategy has been “to build a new brand, create a new category – Chinese whisky. The other is the creation of a product especially and uniquely for the Chinese market to respond to Chinese consumer needs,” he said in an interview at the China International Import Expo in Shanghai on Monday (Nov 6). “There is more in the pipeline.”
While sales fell sharply in China last quarter, Pernod Ricard has said it has already seen signs of improving sales in September and October. And it’s optimistic for the rest of the year as consumers take opportunities to gather together after three years of harsh Covid controls.
Dining out and alcohol have been enduring bright spots for the Chinese economy, which has found itself on fragile footing amid challenges from weak consumer confidence to an ongoing property crisis. China’s shift towards a consumption-centreed economy, after a years-long infrastructure-led boom, is also set to aid Pernod Ricard’s prospects in the country, according to Cottin-Bizonne.
“For us, there is an opportunity that is far bigger than any downside you might see temporarily from some Chinese slowdown,” he said. “We are very positive about the outlook.” BLOOMBERG
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