Pernod Ricard eyes further acquisitions

Following Pernod Ricard’s re-entry into American whiskey with its Smooth Ambler purchase, the group’s CEO has hinted at further bolt-on acquisitions.

Smooth Amber is currently Pernod Ricard’s only American whiskey brand

Speaking to The Spirits Business, Alexandre Ricard, CEO of Pernod Ricard, said: “In terms of further M&A activity, you can expect us to keep on having an active management of our portfolio, both in terms of bolt-ons in the US as a priority market, but other markets as well.”

Ricard also said the group will consider the “disposal of non-core brands or tail brands that we don’t see as fitting our future strategy.”

In December last year, Pernod Ricard sold its Domecq portfolio of brandies and wines to Bodega Las Copas for an undisclosed sum.

In the same month, the firm’s US investment arm agreed to purchase a majority stake in West Virginia-based “craft” whiskey maker Smooth Ambler – a deal that was completed in January 2016.

Smooth Ambler’s co-founder and head distiller John Little will continue to operate the business as CEO, while distiller and director of sales John Foster will lead the brand’s sales and marketing.

The deal marks Pernod Ricard’s en-entry into the American whiskey category, which it exited in 2009 following the sale of Wild Turkey to Italian drinks group Gruppo Campari.

“Smooth Ambler is our latest bolt-on acquisition and we are now a majority shareholder in Smooth Ambler,” said Ricard. “I view this more as a partnership than just an acquisition.

“It’s a small brand and it will be focused on the US market. This acquisition is perfectly in line with our priority US focus as well, and it marks a return for us into the Bourbon industry, which we exited back in March 2009 with the disposal of Wild Turkey. [T]his is clearly not the same size as Wild Turkey.”

In 2015, Alexandre Ricard said that his group had not suffered by being absent from American whiskey since its Jameson Irish whiskey covers the category’s “moments of consumption”.

Yesterday, the CEO said: “I said this from a ‘must have’ versus ‘nice to have’ point of view.

“It is fair to say that we have the largest portfolio of brands covering perhaps the largest moments of consumption around the world and that we no longer have obvious gaps in our portfolio in terms of moments of consumption.

“I think the last obvious gap we had goes back to 2008 before we made the Absolut acquisition. Since then, we don’t have obvious gaps in must have brands. But having a Bourbon is a really nice thing – it’s a simple as that.

“I think even if we still had Wild Turkey and not sold it, we would have still seized the opportunity of Smooth Ambler. It’s a beautiful little brand.”