Pernod Ricard's US Brand Acquisition History
General age of any category in the portfolio looks like it may be a decent proxy for profitability, so let's dive in on that acquisitive company history
After diving in last week, I more or less determined that figuring out category-level profitability for Pernod Ricard in the US is a fool’s errand. But I did find that there might be some correlation between profitability and acquisitiveness, so I’ve spent some time diving deeper into their portfolio to figure out when each Brand entered the House.
Because of the nature of the company, pretty much every current brand was acquired; there aren’t many home-grown brands left in there. But, I do think that focusing on the mix of brands that are less than 10 years old in the portfolio can give a decent lens into how each category is contributing to the full portfolio. I’ve also learned about some portfolio changes that I missed the first time around, so I’ll comment on whatever is most interesting as we go down the list.
Let’s get into it; I’ll follow the same order and structure as I did when I shopped the portfolio.
Champagne and Wine
The Champagnes have been in the portfolio for 20 years now, and Kenwood for 11:
Mumm - 05
Perrier-Jouet - 05
Kenwood - 14
Interestingly, I learned that Camp Viejo was sold off late last year, so there’s no more mass market wines in the portfolio at all.
“Ingredients”
Pernod and Ricard are obviously the foundation of the house, and Lillet is fully integrated at this point. Italicus is the new entrant here:
Pernod - OG
Ricard - OG
Lillet - 08
Italicus - 20
Italicus was clearly acquired in the wake of Aperol Spritz mania, but thus far it doesn’t seem like the push is working (though I do love it).
Cognac
There’s only Martell, and it’s been that way for almost 25 years:
Martell - 01
This brand, like everything from 2001, came from the Seagram acquisition. Would love a deep-dive into that chapter - easily the biggest transformation for the company since the initial merger.
They had a chance to keep Courvoisier in 2005 through another deal, but they passed.
Gin
Mixed bag here! The portfolio expanded to the category with the Seagram acquisition, Beefeater quickly followed, and now they seem to be chasing more premium expressions:
Seagram’s - 01
Beefeater - 05
Monkey 47 - 16
Malfy - 19
Beefeater came with the Allied Domecq acquisition (like everything else from 2005), so both of the big brands here came as the tentpole of a major deal.
Whiskey
The Irish stuff has been around for forever and is essentially the reason the company is in the US at all, and it looks like they’ve been trying to find the American answer for quite some time:
Jameson - 88
Redbreast - 88
Spot - 14
Smooth Ambler - 17
Jefferson’s - 19
Rabbit Hole - 19
TX - 19
Screwball - 23
The most interesting piece here is that they could have acquired Maker’s Mark with the Allied deal in 05, but that piece went to Beam instead. They still got a ton out of that deal, but they’re clearly searching for a replacement since then and they haven’t gotten close.
“Rum”
Both of these liqueurs came with the Allied deal in 2005:
Kahlua - 05
Malibu - 05
They also owned Cruzan for a very short period as part of the Absolut deal, but they sold that to Beam pretty much immediately.
Scotch
This was essentially built by the 2001 and 2005 mega-deals exclusively:
Aberlour - 75
Chivas - 01
Glenlivet - 01
Royal Salute - 01
Ballentine’s - 05
It’s interesting that these are massive volume drivers, but they don’t appear to have been the driving factor for either acquisition. Seems like they own the entry-level duty-free Scotch market almost by accident.
Tequila
A much newer part of the portfolio here overall:
Olmeca Altos - 09
Del Maguey - 17
Avion - 18
Codigo 1530 - 23
As best I can tell, Olmeca Altos is the only “home grown” brand launched this century. Maybe there was a lot of press around that when it launched, but I have no memory of it.
Vodka
The only time I can tell that they went out and did a deal for a single brand:
Absolut - 08
They got some smaller stuff with it and sold it off immediately. They bet huge on Absolut and I’m sure it paid off.
Ready to Drink
These are hard to pin down, but best I can tell everything here is relatively recent. They’re chasing bottled / canned cocktails and seltzers, which is really all an invention of the last 10 years…
The Pernod Ricard US Recent Acquisition Mix Market Map
So basically, the “Rum”, Brandy, Liqueur, and Wine portfolios are well-established and haven’t seen any real changes in nearly 20 years. The Whiskey and Gin portfolios are pretty much 50/50 on established brands and new acquisitions. The Agave, Fortified Wine and RTD categories are pretty much entirely new.
A theme that sticks out to me here: the more “Continental Europe” a category is in origin, the more established it is in the Pernod Ricard portfolio. Whiskey is British and American, Gin in British, Agave is American. There are outliers on both sides, of course: Fortified Wine is very Euro, sand Rum is very not. But the rest of the Wine portfolio, Liqueurs, Brandy, Vodka…all pretty Euro, and all pretty old.
I’m starting to get some ideas on a strategic throughline in the US market that might put them on a better path.