MBWS adopts ‘mainstream’ spirits focusBy Kristiane Sherry
William Peel-maker Marie Brizard Wine & Spirits (MBWS) has announced a strategic focus on the mainstream market segment in order to drive EBITDA gains of €28-37 million (US$29-39m) by 2018.
The new focus was announced in the company’s latest Back in the Game (BiG) 3.0 report, the latest instalment in a turnaround plan first announced in December 2014, due for completion in the 2018 fiscal year.
Key developments in the turnaround plan include optimising distribution networks and selling off real estate assets. In addition, the group has modernised production facilities and secured a strategic Scotch whisky supply agreement with La Martiniquaise Bardient, resulting in an overall reduction in procurement costs.
Through its 2.0 version of its restructuring and optimisation BiG plan, the French drinks group says it will have realised cash proceeds of €30 million by the end of 2017.
The firm is now looking to generate further EDITDA gains by focusing on the mainstream segment of the wine and spirits markets.
“MBWS’ strategy is built on the conviction that the bulk of the wine and spirits market growth over the coming years will be driven by the mainstream and value-for-money segment of the industry, where quality products at affordable prices continue to gain market share,” the company says in a statement.
Citing “sluggish” macroeconomic growth in developed countries and “slowing growth” in many emerging markets, the company believes it can lead “the democratisation of quality wine and spirits”.
The decision to focus in mainstream was also due to increased restrictions on advertising, driven by public health policy, the company said. The decreasing ability to convey “emotional benefits” of products will “constrain the justification for premium pricing”, it believes.
The report also details plans to organise its branded business (William Peel Scotch, Krupnik and Sobieski vodkas, Marie Brizard Liqueurs, Fruits and Wine wine, and Cognac Gautier) into four geographic clusters: Western Europe, Middle East and Africa; Central and Eastern Europe; Americas; and Asia Pacific.
Looking forward, the company disclosed it is now targeting 2018 sales of €590m-€660m (US$625-700m), up from the €450m-€500m (US$477-530) forecast in the BiG 2.0 statement.