Checking in on Pernod Ricard USA's New Moves
What does a new route to market even mean, and will it work?
It’s been a while since I freely gave my advice to the second-largest spirts company in the world, which really boiled down to doubling-down on a “European staple” identity and pushing heritage brand positioning in the US.
Since then, Pernod Ricard has been in the industry news for some big strategic moves in the US market! But unfortunately, they don’t seem to have read my free self help guide…
“Route to Market”
When I set out on this journey, I made it clear that my assessment was going to be product-focused because:
…channel management in booze is a whole thing, it’s very dumb, not at all interesting, and I just don’t want to constantly talk about distributors…
I stand by that. My friends at PR, apparently, disagree.
Per their press release on August 29th:
Following the appointment of Chief Commercial Officer Paul Basford, who joined the company in December 2024, the organization has reimagined its Route-To-Market (RTM) approach, sharpened its portfolio focus to maximize potential, and deepened its commitment to distributor partnerships.
That “sharpened its portfolio” line has some promise, but I’m not optimistic. RTM is not a term I’ve ever really used - maybe it’s European. I always use “Go to Market (GTM)” but I think it’s more or less the same thing. It can mean 1 of 2 things:
The way you position yourself and your value proposition - essentially, your brand (and how you’re making it real)
The literal, physical way you get your product through the chain and to consumers
The former is fun and interesting! The latter is not. I get the sense they primarily mean the latter, although I could be wrong. The thing they’re really, actually talking about is their commercial structure (which is a blend of both of those elements). Again from the release:
RTD Division – Focused on the fast-growing Ready-to-Drink category, this team brings dedicated execution and agility to one of the industry's most dynamic segments. Based on their proven track records and extensive market experience, Reyes Beverage Group, Crescent Crown and their network partners have been selected as new distributors across seven key states. They join a roster of existing RTD distribution partners — including Southern Glazer's Wine & Spirits and Republic National Distributing Company — with a shared mission to amplify and accelerate ambitious growth plans for a strong portfolio of ready-to-drink offerings from global icons like Malibu, Jameson, and most recently, The Absolut Ocean Spray® RTD line. This went into effect on May 1st.
GEM Division – Tasked with incubating and scaling the next generation of high-potential brands, this division will ensure they receive the focus and care needed to thrive. A bespoke state-by-state distributor approach will provide tailored support - introducing new partners like Crescent Crown and Johnson Brothers/Maverick, while building existing ties with partners like Southern Glazer's Wine & Spirits, Republic National Distributing Company, Breakthru, Heidelberg, and Martignetti Companies. This goes into effect on September 1st.
RTD
I was very bearish in PR’s RTD portfolio in my assessment, and frankly I stand by that. The space is so crowded and it doesn’t align with the heritage value of the brands they’re trying to use to enter it. This is transparently just a distribution play - they want to look and act more like an AB InBev so that they can get more distribution. And I’m sure it will work to some degree. I just don’t think this is the right place for them to play. It’s hard to win a game that everyone else is playing.
GEM
I want to know what this means! Is it just “gem” in caps? Is it an acronym? If so, for what? I have no good ideas! This is the exact opposite of what they’re doing in RTD - the state-by-state approach allows for smaller batches and some real test-and-learn abilities that could be good. But still, “incubating and scaling the next generation of high-potential brands”? You already have a stable of those! You DO NOT need more new brands, you need use cases and identity around the brands you have.
Will this lead to the next Italicus? Maybe! But how many of those home runs do you need to hit for this to be worth it? Why not put more weight behind the stuff that’s already in every liquor store, but getting dusty all the same?
Summary
I’m glad they’re trying something new at least! They clearly need to with 6% sales decline. I just don’t think it’s the right thing. I don’t see how this really leverages the inherent value they’re sitting on, and the RTD move especially feels risky; walking that back will be expensive given the scale they have to operate at.
All of this is spending a lot of time and money on finding the next big thing. I just happen to think they may already be sitting on it.