Pernod CEO: Headwinds can be ‘sources of opportunity’
The spirits industry will always be faced with challenges but if companies are diverse enough they will be able to “leverage these as sources of opportunity”, the CEO of Pernod Ricard has said.
Speaking to The Spirits Business during the TFWA World Exhibition & Conference in Cannes, France, last week, Alxandre Ricard, Pernod Ricard CEO, commented on challenges facing the spirits industry in travel retail at the moment.
When asked about Brexit, Ricard noted the lack of information about what would happen once the UK leaves the European Union, which is currently due to take place on 31 October.
He also spoke about the political turmoil affecting Hong Kong, which has been rocked by anti-government protests for several months now and affected traveller numbers.
“The reality is there will always be headwinds, but also tailwinds,” Ricard said. “But if you’re diverse enough, you can always work your way around it and leverage these as sources of opportunity.
“Brexit, I don’t know what’s going to happen; I don’t think anyone does – including the ones working on it.
“The Hong Kong situation is not easy as well. It’s impacting travel numbers – but at the same time we tend to take a longer-term view.
“At the end of the day, we do foresee passenger numbers growing over time, which makes travel retail a huge opportunity for our company.”
E-commerce potential in travel retail
Pernod Ricard reported a 6% sales spike in travel retail during its full-year 2019 financial results.
Ricard also highlighted the potential that e-commerce holds in travel retail, following its partnership with price comparison app Jessica’s Secret.
Pernod Ricard teamed up with Jessica’s Secret in May this year to offer Chinese travellers a “one-stop travel retail e-commerce shop”.
“E-commerce is a great opportunity as well to focus on travellers, consumers, to engage with them,” said Ricard. “I like to say e-commerce is one of the different focuses of our online strategy. We have many different channels, one of which is e-commerce.
“The Jessica’s Secret partnership was a great opportunity to accelerate from that point of view, to test how it can work, how we can engage with travellers – and specifically focus on Chinese travellers.”
The Jessica’s Secret collaboration was also a talking point during a Pernod Ricard panel discussion during the TFWA World Exhibition & Conference.
Hosted by drinks and spirits expert Neil Ridley, the panel comprised Ricard; Mohit Lal, CEO of Pernod Ricard Global Travel Retail; Mirko Wang, Jessica’s Secret CEO; and Carolyn Childs, CEO of Mytravelresearch.com.
Wang expressed ambitions to grow Jessica’s Secret into a pre-ordering platform, where travellers can book, pay on the app and collect their orders at retail counters.
“Our goal is to help consumers by offering a more convenient shopping experience and to bring retailers more traffic into their online stores,” Wang said.
“We have to ask what do consumers want? For consumers, saving money, time and energy will always be what they want. That’s why Amazon and Taobao exist.
“It’s about fulfilling a need and creating a new one. For example, people do not want to fight for a taxi, which is why we have Uber.”