Pernod Ricard sales and results, UK supermarket update

Good spirits

Pernod Ricard has released its 2015-16 sales and results. “Solid” and “encouraging” are the words the company uses to describe them. This translates to sales passing the post just a nose in front, with one star aspect being a free cash flow increase of 31 per cent to €1.06 billion ($1.56 billion).

Sales totalled €8.68 billion, up 2 per cent.

The split between established and emerging markets:

  • Mature markets: €5.41 billion, up 1 per cent
  • Emerging markets: €3.27 billion, up 3 per cent
  • Group share of net profit from recurring operations: €1.38 billion, up 4 per cent

Geographical regions:

  • Americas: 29 per cent, up 4 per cent
  • Asia and rest of world: 40 per cent, up 1 per cent
  • Europe: 31 per cent

In the Americas, Jameson Irish Whiskey was up but Absolut Vodka is still giving the company issues. Tequila is doing well, as is cognac. Wine gets little mention, except Jacob’s Creek is doing well in Canada.

On Asia and the rest of the world, the company says there were very good performances in India, Africa, the Middle East, Japan and Australia.

India was one of the stars, recording an increase of 12 per cent. In Africa and the Middle East combined, Chivas and Jameson were each up 19 per cent. Perrier-Jouët was cited as a driver for growth in Japan. Jacob’s Creek gets a mention for its performance in Australia. China and Korea were the markets in decline and held sales in the region back.

In Europe, France was down but Spain up. In the UK the company cites good wine performance but there’s no mention of Jacob’s Creek, the drivers being Campo Viejo (Spain) and Brancott Estate (New Zealand). Russia and Poland were both up.

Across all markets wine was up 5 per cent, the better news being that Jacob’s Creek has returned to growth. The 14 premium brands were responsible for 75 per cent of the company’s sales.

14 top brands

Jameson sales grew 16 per cent overall, and 23 per cent in the US, where it represented about a quarter of the company’s sales. It was the 27th consecutive year of growth for Jameson, which sold 5.7 million cases globally.

In Ireland Pernod Ricard’s whiskey brands, which also include Powers and Redbreast, had an 83 per cent share of the market.

Wine accounted for 6 per cent of Pernod Ricard turnover. The company says little about it:

“Strong performance of Brancott Estate and Campo Viejo. Growth expanding across a number of markets including USA, UK, Sweden, Ireland and Russia.”

“Return to Growth for Jacob’s Creek. Strong performance in Australia offsetting decline in the UK.”

Debt has been reduced but it’s still high at €8.72 billion.

Super news

The UK supermarket scene continues to shift. The latest grocery share figures from Kantar Worldpanel, for the 12 weeks ending August 14, 2016, show the overall market grew 0.3 per cent.

Kantar says this was the fastest acceleration for the overall market since March 2016, and puts it down to good weather. Frozen confectionery sales grew by 23 per cent in the last month, and chilled drinks increased by 10 per cent.

The German discounters, such as Aldi and Lidl, are having an effect on promotional campaign sales:

“Only 37.7 per cent of grocery sales were bought on any kind of promotion this period – a significant decrease from highs of over 40 per cent seen in 2015.”

This was due to a focus on own label lines and consumers preferring constant low prices, Kantar says. Premium retailer brands were up 9 per cent, while value lines increased by 2 per cent.

Grocery price inflation remained negative, with a representative basket of goods 1.3 per cent cheaper than last year.

  • Lidl was the fastest growing supermarket, with sales up 12.2 per cent.
  • Aldi sales rose 10.4 per cent
  • Co-op sales rose 2.8 per cent
  • Waitrose sales rose 1.4 per cent
  • Asda sales fell 5.5 per cent
  • Morrisons sales fell 1.8 per cent
  • Sainsbury’s sales fell 0.6 per cent
  • Tesco’s sales fell 0.4 per cent

Supermarket share as of August 12:

Grocey sales 12 week to 16 Aug

For the Australian wine industry this means home brands are likely to increase, and promotional periods will diminish. Waitrose is one supermarket that keeps running monthly promotions. The current Australian wines on promo are:

  • McGuigan Family Release Chardonnay, save 1/3, £8.99 to £5.99 ($15.70 to $10.50)
  • Heirloom Adelaide Hills Chardonnay, 25 per cent off, £19.99 to £14.99
  • Rolf Binder Highness Riesling, 20 per cent off, £10.99 to £8.79
  • Yalumba Organic Viognier, 25 per cent off, £9.99 to £7.49
  • McGuigan Family Release Shiraz, save 1/3, £8.99 to £5.99
  • Wirra Wirra Church Block Cabernet/Shiraz/Merlot, 20 per cent off, £13.49 to £10.79
  • Rosemount Grenache/Shiraz, 25 per cent off, £8.49 to £6.29
  • Barossa Valley Estate Shiraz, 25 per cent off, £12.99 to £9.49

Campbell’s Rutherglen Muscat, save £1.50, £12.49 to £9.99

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