Pernod bets on Rabbit Hole and Avión in US
Pernod Ricard’s US shake-up aims to ‘future-proof’ the business, nurturing tomorrow’s stars like Rabbit Hole, Avión Tequila and Malfy Gin, according to chief commercial officer Paul Basford.
Earlier this month, Pernod Ricard announced it would restructure its commercial operations in the US, dividing the brands outside of its core portfolio into two divisions – Gem and RTD.
Gem brands include the likes of Rabbit Hole, Irish whiskeys Spot, Powers, and Method and Madness, Plymouth Gin, Aberlour, Scapa, Avion, Malfy, Elyx, Smooth Ambler, Goslings, Ojo de Tigre, Ramazzotti, Mash & Mallow, Mary Dowling, La Hechicera and Ki No Bi gin.
The new RTD (ready-to-drink) division will focus on Pernod Ricard’s brands in this segment in the US, primarily RTD line extensions from Jameson, Malibu and Absolut.
Through the new strategy, the company has dedicated specific distribution companies and teams to the divisions.
Pernod Ricard USA has partnered with several new distributors, including Reyes Beverage Group and Crescent Crown, in seven key states, and Johnson Brothers. They will work alongside existing partners such as Southern Glazer’s Wine & Spirits and Republic National Distributing Company (RNDC).
Basford, who joined Pernod Ricard in November last year from William Grant & Sons, explains that the new structure is a “reflection of the market”, which is seeing strong growth in RTDs.
The new RTD division will see Pernod Ricard move distribution in eight states to beer-focused distributors, with the majority managed by Reyes Beverage Group, alongside Crown Crescent (who operate in Arizona and Louisiana).
“The beer distributors bring scale,” Basford highlights. “They bring the ability to have lots of cans on the floor and their direct to store, delivery networking in grocery really helps.”
Basford believes that growth in the wider RTD category will come from canned serves, rather than bottled ready-to-serve (RTS) formats.
He adds that the group’s RTD business is “very highly concentrated” with 50% of its business in eight states, including California, Florida and Arizona. “We’re focusing particularly on these eight states that give us a 50% penetration and therefore we can build that 50% with the beer distributors in a different way.”
Gem division
Speaking about the Gem division, Basford described it as a “collection of incubation brands and brands that we believe have high potential in the market to flourish further”.
For the Gem portfolio, Pernod Ricard has brought in “very strong” national distributors, including Breakthru Beverage, Johnson Brothers and Empire Merchants.
Basford explains that the brands are “gems that need [a] polish and need to be worked through the system to grow and get distribution appropriately”.
This division will follow a state-by-state distribution approach with tailored support from new partners such as Crescent Crown and Johnson Brothers, and existing distributors.
Johnson Brothers will represent Pernod Ricard’s Gem portfolio across 11 states: Hawaii, Indiana, Iowa, Minnesota, Nebraska, North Carolina, North Dakota, South Dakota, Texas, Virginia, and West Virginia.
“It makes a lot of sense when you’ve got a wide portfolio to be able to break them up,” he says of the Gem division. “They have different needs, they’re smaller brands, newer brands, incubation brands that have different needs to the likes of Jameson, Absolut and Malibu. So that’s the essence of why we’re doing this as a way of future-proofing the business. We believe we have some growth stars in that Gem portfolio to support the mainline business, and it’s about incubating and growing those at scale through that separate approach.”
Basford says the main drivers for the decision to shake up its route to market was due to the US being “very complex”.
He continues: “We’re looking for pockets of growth in a market that’s been tough post-Covid and that has been normalising post-Covid.”
Future portfolio stars
The aim is to “unlock sustainable growth”, he adds, noting that in the future “one or two of these Gem brands could be the stars [of Pernod’s portfolio] in five to 10 years”.
In terms of the brands with high potential, Basford identifies the group’s “strong” agave portfolio and premium gin.
“Within Gem, we’ve got Ojo de Tigre mezcal, we’ve got Avión that has been a former great Tequila that we’re looking to reignite. And then I think there’s a real opportunity in premium gin with Malfy and Plymouth – two real kind of powerhouses in gin that we believe can be that next premium gin iteration that can compete with [brands like] Hendrick’s. So we believe in those brands.”
Basford also pointed to the group’s American whiskey portfolio, including Rabbit Hole, which he believes will “probably become one of the biggest brands within Gem”.
He adds: “I’d be remiss without mentioning Gosling’s rum, a household staple and fantastic brand. It’s one of the most recognisable, widely distributed brands in the market, highly respected, great quality. We believe in pushing it through Gem that it gives it a new oxygen and a different way of evolving, versus being in a wider portfolio.”
Regarding the gin category, Basford says the market experiences ups and downs but he expects growth to come from products “north of US$30 a bottle”.
Talking about Scotch, Basford notes that the category has “had a tough time” but has since normalised after the pandemic. “We are seeing a trend, through velocity, of people coming back in to Scotch. Bourbon is one of the few categories that’s probably a more positive story in alcohol beverage at the moment.”
He highlights good growth for Jefferson’s Bourbon in the last quarter of the group’s financial year.
“We’re optimistic about both categories [Bourbon and Scotch] as we look to full-year 2026 and I think we’ve got the right brands to encapsulate that opportunity,” he emphasises.
As for the company’s ambitions in the US, Basford says the company will focus on returning its business to growth in the market, adding: “I think the business is in a strong place to take advantage of the market opportunities.”
Last month, the French firm reported a full-year sales decline of 6% in the US, dragged down by ‘subdued consumer confidence and economic moderation’.
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