Pernod to focus on premium spirits to drive sales

As sales continue to slide, Pernod Ricard has said it will focus on demand for premium spirits in the US and India, as well as Cognac recovery in China, to accelerate sales growth.

Pernod Ricard will focus on higher priced spirits in the US and India to drive sales

The French drinks firm said during its Capital Market Day on Tuesday that aims to speed up underlying sales and operating profit growth by 4-5% in the medium term.

“Our medium-term goal is to return to our historical average [sales] growth rates,” Alexandre Ricard, Pernod Ricard CEO, told Reuters.

“Today, we look at external, bolt-on growth opportunities. Small, or medium-sized deals.”

Ricard also said it strives to one day become the world’s largest spirits company knocking Diageo from the top spot, and did not rule out further acquisitions to achieve such status.

The maker of Martell Cognac and Absolut vodka admitted gross profit margins were “still under some pressure”, although there have been recent improvements.

In April this year, Pernod Ricard reported the beginnings of a “gradual improvement” in sales, bolstered by better performances in China and the Americas.

The group has witnessed sales declines in Asia-Pacific over the past two years as a result of the Chinese government’s austerity measures, which forced the company to undertake a global cost-cutting mission called Project Allegro.