A popular SA gin has just been bought by the French giant Pernod Ricard

French liquor giant Pernod Ricard, the manufacturer of popular liquor brands such as Absolut Vodka, Chivas, and Jameson, has acquired a majority stake in South African distillery Inverroche.
Inverroche, founded in 2011, is based in the rural community of Still Bay in the Western Cape, where it pioneered the use of indigenous fynbos in gin production.
Founder Lorna Scott will maintain a shareholding in the business, and continue as CEO.
She said the deal is a vote of confidence in South Africa’s economic prospects.
“[Pernod Ricard’s] vast distribution network will enable Inverroche Gins to reach new consumers,” Scott said.
“We will be taking a luxury African brand to a large audience and sharing the story of our common heritage.”
The terms of the deal have not been disclosed, and is expected to close shortly.
Scott started Inverroche as an attempt to protect fynbos in the Western Cape, which is under threat from agricultural development and invasive alien species. It grows nowhere else int he world.
Fynbos, which has long been used medicinal and culinary purposes, gives Inverroche its unique taste and flavour.
The company produces three gins, Gin Classic, Gin Verdant and Gin Amber, which are now sold in 18 countries on four continents. Its portfolio also includes two rums and three liqueurs.
70% of the distillery’s workforce are women from the surrounding area.
Pernod Ricard already has a strong presence in South Africa, selling and distributing more than 12 liquor brands in the country.
It also bought shares in South African e-commerce platform Jumia in 2018, after partnering with the company since 2016.
Earlier this year Pernod Ricard acquired US super-premium bourbon brand Rabbit Hole and Italian gin brand Malfy from New York-based Biggar & Leith.

An article from Business Insider South Africa by James de Villiers
https://www.businessinsider.co.za/south-african-gin-inverroche-acquired-french-liquor-giant-pernod-ricard-absolut-vodka-chivas-and-jameson-2019-7

China Invests In Ningxia Wine Region

Thanks to assistance from the central Chinese government and the Ningxia Agricultural Reclamation Management Bureau, the Ningxia wine region in northern China is expecting to double its vineyard area and quadruple wine production by 2022. Commercial vines were first planted here in 1982 by large wineries such as Great Wall and Changyu. The intervening years have seen a lot of investment from both the wine sector, such as Pernod-Ricard and LVMH, and owners from non-endemic industries such as petroleum, construction and domestic appliances. The first winery in the region opened in 1985.
Acreage under vine here grew from 6,575 acres in 2004 to 97,112 in 2014. Both the national and regional government are encouraging the creation of boutique wineries, primarily because of Ningxia’s unfounded reputation as the home of nothing but large, industrial-scale winemaking operations. The major project underway is the Ningxia Experimental Area, with 3,212 acres (1,300 hectares) devoted to vineyards and wineries. This large arid area between the base of the Helan Mountains and the Yellow River was basically desert prior to its division into 50 individual plots of just over 49 acres (20 hectares), each of which will provide grapes for its own small onsite winery.
In a region that already has 86 licensed wineries and 80 more under construction, this venture will rather rapidly add 50 wineries in a dedicated area which also has 700 acres devoted to roads, birch and pine trees planted for windbreak between the vines, visitor facilities and parking for buses and private cars.
The Ningxia Wine Bureau imported only a handful of grape varieties that are popular in China: Cabernet Sauvignon, Cabernet Franc, Pinot Noir, Merlot, Marselan, Malbec, Petit Verdot, Chardonnay and Viognier. As vines are being planted and wineries built, the Wine Bureau is carrying out tests to see which of these vines is most suitable to the soil and climate. This is a very cold region, where vines are planted at a 35 degree angle in order to bury them under soil from November to April so that they do not freeze and die under heavy winter snowfall.
All of the vines are imported directly from a French nursery, where they are evaluated by Chinese inspectors prior to export and are certified disease and virus free. No material—including roots, vines, or any young harvested grapes—may be removed from the experimental vineyard for three years, and all vines are subject to frequent inspection in order to insure that they remain free of pests. Fortunately this high altitude region (3,800 feet above sea level) is very dry, so while it is good for growing grapevines, it is inhospitable to mold, mildew and insects.
In order to tempt wineries to establish a foothold in the Ningxia Experimental Area, the local and national governments are offering the first five years for each establishment for no fee. During this time, investors can build their winery and plant grapevines, which take on average 4 years to produce grapes suitable for winemaking. Electricity and water will also supplied at no charge during this time period. From years 5 through 10, wineries will pay a 5% fee on their receipts to the government, and after the 10th year—which is more than enough time to establish a winery—businesses will bear the full cost of land rental and utilities. Investors wishing to participate in the project must submit an application and be approved by the local government and the Ningxia Wine Bureau.
Although at the current moment the Ningxia Experimental area is just a large plot of dusty land with a few young vineyards and a beautiful mountainous backdrop that is populated with construction equipment and vineyard workers, it is exciting to think of what it will look like in 10 or 20 years. A dedicated, purpose built wine region that is constructed almost at once is almost unthinkable to those who are used to visiting well established old world wine regions. With wide lanes to accommodate guest and employee traffic, parkland and visitor facilities onsite, a bicycle path and 50 boutique wineries, the Ningxia Experimental Area will surely be one of the world’s most talked about wine destinations.

An article from Forbes by Mike DeSimone and Jeff Jenssen
https://www.forbes.com/sites/theworldwineguys/2018/09/24/china-invests-in-ningxia-wine-region/#7c5ea5a848d3

PERNOD RICARD MULLS SALE OF WINE BRANDS

Pernod Ricard is said to be considering selling its wine division, which includes its largest wine brands, Campo Viejo and Jacob’s Creek.

A report published in Bloomberg this morning claimed the company was in “early discussions” on a potential sale of the $500 million unit, quoting sources “familiar with the matter”, who wished to remain anonymous.

Pernod Ricard reportedly told Bloomberg in an email they did not comment on speculation, adding that “The group was under no external pressure and has already mentioned several times that it intends to continue the dynamic management of its portfolio.”

However, speaking to db at a press briefing last month, CEO and chairman Alexandre Ricard revealed that he would continue to “dispose” of brands that “no longer fit” within the drinks giant’s portfolio, following the sale in January of Argentine wine brand Graffigna to Chile’s VSPT.

At the time, Ricard said the company was “committed” to growing value sales over volume sales. “Our wine volume sales are down by 8% due to our value focused strategy, which we’re not afraid of pursuing,” he said.

The company’s wine brands include Australian giant Jacob’s Creek from Barossa Valley, which was today named as the third most powerful wine brand in the Global Wine Brand Power Index compiled by Wine Intelligence. Other brands in the stable include Rioja brand Campo Viejo, New Zealand’s Brancott Estate, Stoneleigh and Church Road, boutique brand Ysios, and California brand Kenwood in Sonoma, which it bought in 2014.

In January Pernod Ricard announced it was selling its Graffigna, Colón and Santa Silvia wine brands to Chilean wine giant VSPT for an undisclosed sum, as part of the ongoing plan to strip back volume driven listings that focus on discounting.

The company’s Graffigna winery and vineyards at Pocito and Cañada Honda in San Juan and La Consulta in the Uco Valley in Mendoza were also included in the deal.

It follows the announcement in December that US-based hedge fund Elliott Management had taken a stake in the French company, although it berated the company for its “disappointing” track record in merger and acquisitions and underperformance.

Pernod is not the only large company divesting its wine brands – rival Diageo sold its wine business in 2016 to Treasury Wine Estates for £361 million, while last month group Constellation confirmed rumours that surface in October that it was offloading around 40% of its wine brands to concentrate on its higher priced power brands.

An article from The Drinks Business by Arabella Mileham
https://www.thedrinksbusiness.com/2019/03/pernod-ricard-mulls-sale-of-wine-brands/

Pernod to invest in Chivas Regal to rebuild brand in China

Pernod Ricard plans to invest more money in Chivas Regal to rebuild the blended Scotch whisky brand in China after admitting the company “made mistakes”
Speaking at a roundtable meeting in London (5 September), Laurent Lacassagne, Chivas Brothers CEO, opened up about “mistakes” made by the French drinks group when it came to Scotch whisky in China – particularly with the Chivas Regal brand.
In its latest full-year results, Pernod announced a 3% organic sales decline for Chivas Regal globally, with volume sales down 2%.
“We made some mistakes. But the whisky market in China is starting to rebuild itself,” said Lacassagne. “We believe we have the foundations to bring back brand growth in the China market.
“We will focus on China with [Chivas Regal] Extra, which currently launched on 1 September in China. We have started to significantly invest in the brand from this year. We are working in the right way.
“We are adding a new platform with sport. We believe sport is relevant for our target audience. Our target sport in China is the NBA, which is starting this autumn.”

An article from The Spirits Business by Melita Kiely
https://www.thespiritsbusiness.com/2017/09/pernod-to-invest-in-chivas-regal-to-rebuild-brand-in-china/

Pernod FY profit up 13% as China bounces back

Pernod Ricard’s net profit totalled €1.39 billion (US$1.65bn) in 2016/17, driven by a return to sales growth in China, a strong performance from its international brands, and tight cost control management.
In the French group’s full financial year ending 30 June, sales grew by 3.6% organically – without the impact of currencies and acquisitions – to reach €9.01bn (US$107.1bn).
Pernod, maker of Jameson and Chivas Regal, credited the acceleration in part to the performance its Strategic International Brands, which were up by 4% on the previous year.
The group highlighted a return to growth for Cognac brand Martell and vodka brand Absolut, up by 6% and 2% respectively.
Geographically, improvements were driven by the US, Eastern Europe, Global Travel Retail and China – which returned to sales growth for the first time since 2013.
Meanwhile the Americas region grew by 7%, Europe was up by 3% and Asia-Rest of World enjoyed a 1% sales boost.
A third of the group’s growth was driven by innovation – new products or line extensions of existing brands.
In January, the group introduced a lime variant for Absolut, and launched caviar-infused vodka brand, L’Orbe in March.
Pernod Ricard continued to actively manage its portfolio in 2016/17, acquiring majority stakes in Smooth Ambler, and Del Maguey, and disposing of vodka brand Frïs, brandy and sherry business Domecq, and the Glenallachie distillery. The firm also acquired a majority stake in Corby Spirit & Wine, owner of the Ungava gin brand.
Fourth quarter sales rose by 3% organically and 5% on a reported basis – taking into account the impact of exchange rates and acquisitions – “broadly consistent” with underlying trends.
Alexandre Ricard, chairman and chief executive officer, said: “FY17 was a strong year, delivering profit from recurring operations in line with guidance together with an excellent cash performance.
“These results demonstrate that the strategic direction the Group adopted two years ago is delivering: growth is accelerating and diversifying through successful activation of our strategy.”
Looking ahead, he said Pernod will continue to implement its roadmap, focusing on digital, innovation and operational excellence.
“We are confident that we will continue improving our business performance. As a consequence, our guidance for FY18 is organic growth in profit from recurring operations between +3% and +5%,” he added.

An article from The Spirits Business by Annie Hayes
https://www.thespiritsbusiness.com/2017/08/pernod-fy-profits-up-13-as-china-bounces-back/

Martell unveils VS Single Distillery

Pernod Ricard-owned Cognac house Martell has released a new expression containing eaux-de-vie produced solely from one distillery, named Martell VS Single Distillery.
The blend is said to create a “richer” expression of the Martell style with an “elegant, fruitier profile”.
The colour of liquid gold, Martell VS Single Distillery is described as having “notes of plum, apricot and candied lemon” on the nose.
The new offering revives the iconic shape of the traditional ‘montre’ Cognac bottle. The restructured cap is sealed with a beige paper ribbon, revealing its cork, along with the new label, both stamped with Jean Martell’s signature, the Martell House founder.
“The House of Martell has always prioritised luxury to focus on the very quality of its blends, and as a result, the Martell expressions are characterised by outstanding depth and intricacy,” said Brian Smith, brand director, marketing, Martell, Pernod Ricard USA.
“With Martell VS Single Distillery, we aim to go further, with a disruptive, supremely smooth blend, born out of the spirit of curiosity, using only one distillation source.
The new expression is recommended served neat or in a long drink or cocktail, pairing well with citrus fruits and red berries.

An article from The Spirits Business by Nicola Carruthers
https://www.thespiritsbusiness.com/2017/03/martell-unveils-vs-single-distillery-in-the-us/

Pernod Ricard announces the sale of Glenallachie distillery

Pernod Ricard, the world’s number 2 in wines and spirits, announced today the signing of an agreement with Billy Walker, Graham Stevenson and Trisha Savage of The Glenallachie Consortium, an independent Scottish company producing whiskies and offering a premium selection, for the sale of the Glenallachie distillery, located in Scotland.
The acquisition has been operating through Pernod Ricard’s subsidiary, Chivas Brothers Limited.
The transaction includes the Glenallachie single malt brand and the MacNair’s and White Heather blended scotch brands.
The closing of the transaction is subject to the customary conditions and will take place before the end of 2017.

An article from Vinexpo Newsroom
http://www.vinexpo-newsroom.com/pernod-ricard-announces-sale-glenallachie-distillery/