Pernod to invest in Chivas Regal to rebuild brand in China

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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/

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Pernod FY profit up 13% as China bounces back

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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/

The blossoming trend of Japanese gin

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In Japan, the shoots of a craft gin movement have grown into a force to be reckoned with. But, asks Melita Kiely, what actually makes a gin ‘Japanese’?
A love story has been blossoming in the world of food and drink, and the protagonist is Japan. In recent years, consumers from the UK, US, Europe and Australia have become increasingly infatuated with Japanese culture – and now it seems gin has been hit by Cupid’s arrow from the land of the rising sun. Gin’s ascent to the top of the white spirits category has been phenomenal to witness over the past few years, and a breakaway sub-category appears to be forming – and flourishing – as Japanese gin soars in consumers’ affection, both in the country and abroad.
Trailblazing the way for other producers to follow was UK-based The Cambridge Distillery, which has carved a revered reputation throughout the industry for its innovative, experimental approach to spirits. In March 2014, the distillery created the “world’s first” umami Japanese gin, made using Japanese botanicals including yuzu peel, shiso leaf, sansho pepper and sesame seeds. But why did the company fixate on Japan?
“We were working with Japanese flavour profiles and I became absolutely obsessed with the botanical range Japan had to offer,” explains Will Lowe, co-founder and master distiller at The Cambridge Distillery. “I was completely bemused that nobody had made anything with it from a distillery point of view. The rise of consumers’ fascination with all things Japanese is one of those things where people just seem to have clicked with a demographic because of popular culture; we see the same patterns in food, fashion, music, art – it’s not just spirits.”
It has since become apparent that Lowe wasn’t the only one thinking in that way, as many more Japanese or Japanese-inspired expressions have recently come to market. Take, for example, the founding of The Kyoto Distillery in Japan and the launch last October of the company’s first gin: Ki No Bi. Then in May, less than year a since its inaugural launch, the distillery released two limited edition bottlings: Ki No Tea, made in partnership with tea blender Horii Shichimen, and Ki No Bi Navy Strength. “Three years ago, lots of people started thinking similar things, and for a long time worked in complete isolation,” says David Croll, co-founder of The Kyoto Distillery. “But there’s since been a lot of movement inspired by the gin revolution.”
Even the big players are keen to dabble in this new trend. One such firm is Beam Suntory, which unveiled premium Japanese gin Roku in May. Created at the firm’s Osaka-based distillery, Roku is made with six Japanese botanicals: cherry blossom, cherry leaves, green tea (sencha), refined green tea (gyokuro), Japanese pepper and yuzu, alongside eight more traditional gin botanicals. “Global appreciation for Japanese culture and craftsmanship is on the rise,” explains Rebecca Messina, chief marketing officer at Beam Suntory. “We’ve seen this in the continued increase in demand for our Japanese whisky portfolio, and we also see a broader appetite for other well crafted premium Japanese products.”
Not long after Roku’s launch, Nikka unveiled its own Japanese gin, Nikka Coffey Gin, but insists its creation was not a knee-jerk reaction to what is being dubbed the ‘Japanese gin boom’. “We started this project three years ago,” says Emiko Kaji, international business development manager at Nikka. “We didn’t expect to see such a phenomenon when we started.”
In Japan itself, gin has never been the spirit of choice – particularly in the off-trade. Croll attributes this partly to the Japanese culture of living in smaller houses, meaning consumers are more selective over what spirits they keep at home because of storage constraints. Meanwhile, in the on-trade, gin has “always been there”, according to Croll, but the spirit has been more of a “workhorse” ingredient for bartenders as others take precedence – always the bridesmaid, never the bride.

Two styles emerge
What’s clear though is that there are two different styles of Japanese gin emerging – one created in the country, the other crafted abroad. But with consumers increasingly scrutinising brands over production methods and provenance, and in an industry built on values of authenticity and quality, will the launch of further Japanese gins confuse patrons? Are legislative boundaries needed to forestall perplexity between ‘Japanese’ gins and ‘Japanese-inspired’ gins? Opinions are divided.
“We made a real point of being transparent about provenance when bottling Japanese Gin, and making it as simple as it could be,” insists Lowe. “Yes, it’s called Japanese Gin, but we made it very clear that it’s Japanese flavours distilled in England. Nobody thinks our Anty Gin is made by ants. But for Japan, we thought consumers might mistake provenance if English isn’t their first language. So we called it ‘Japanese Style Gin’ for export market labels. It’s a representation of flavour rather than provenance.”
However, for Croll, there’s only one way a gin can be labelled ‘Japanese’. “Japanese gin can only be made in Japan,” he insists. “A lot of UK gins use ingredients from Africa, but aren’t called ‘African gin’. One thing we have been particular about is provenance. It’s very easy to say: ‘We use sansho,’ but it needs to mean something. In Kyoto, we talk to the farmers, pick and peel the ingredients ourselves. As we have seen with non-Japanese gins, there are well thought out producers and some that are slightly more opportunistic, perhaps.”
Nikka is less concerned by semantics. “We don’t want to be boxed into the ‘Japanese gin’ category,” says Kaji. “But saying ‘Japanese gin boom’ is easy for consumers to understand; it’s catchy. There’s no definition of craft gin itself, and there’s no definition of Japanese gin. We don’t see Nikka Coffey Gin as ‘Japanese gin’; it’s just Nikka gin.’
But with larger firms such as Nikka and Beam Suntory finding their feet as Japanese gin producers, will independent distillers keep their footholds in such a competitive category? “It’s actually since the big producers have launched their products that our sales have gone up, while media attention has been incredible and is bringing more people to the category,” enthuses Croll, who says that as long as the quality is high there is still room for more Japanese gins to come to market. “If you have a good product with a real story and sense of provenance, you’ve nothing to worry about – you’ll be here for a long time.”
And for a nation that is just starting to fall for gin, surely an influx of expressions made with familiar flavours can only pave the way for other gin brands – Japanese-inspired or otherwise – to follow. As Craig Fell, director and co-owner of Japanese-inspired gin Kuro, says: “If gin gets good traction in Japan and becomes the drink of choice, the potential for growth is huge. Brands like ours that use ingredients that Japanese consumers know will help open up the market and create more demand.” If Fell’s forecasts are right, the love story between Japan and gin looks on course for a very happy ending.

An article from The Spirits Business by Melita Kiely
https://www.thespiritsbusiness.com/2017/08/the-blossoming-trend-of-japanese-gin/

Conigliaro debuts cocktail bar in Cognac

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Renowned drinks expert Tony Conigliaro has opened a new Cognac-focused cocktail bar in France, marking his first international venture outside of the UK.
The new bar, called Luciole, is located on the banks of River Charente in Cognac. Opening earlier this month, Luciole is housed in an historic building that was formerly a horse and carriage stables.
The bar has a vast and unique Cognac selection representing the whole of the Cognac category. Carefully curated by Conigliaro and his business partner Guillaume Le Dorner – who will manage the premises ­– the collection is displayed on the “Cognac Wall”, a signature feature of the bar.
The 50-cover bar offers an “all-encompassing Cognac experience”, where guests will be able to stay, dine and familiarise themselves with all of the leading Cognac houses. An accessible drinks menu allows visitors to discover Cognac through a variety of angles: age statement, vintages, terroirs, crus and brands.
The cocktail menu features 18 drinks, with a focus on Cognac. House creations include long refreshing drinks such as a Spitfire – Cognac VSOP, crème de pêche, lemon juice, sugar syrup and white wine, and Conigliaro’s twist on a classic New York Sour, which matches a Cognac sour with a peach liqueur.
Shorter, more “serious” drinks include Avignon, which combines Avignon incense, Cognac and Roman chamomile syrup – which is part of a drink series on meditation and religion named after the French city, also known as the “City of Popes”.
The kitchen, a partnership with a local chef, currently offers a simple menu of classic French bar food. Sharing plates include classic French charcuterie and saucission, as well as local cheeses and a tartlets menu.

An article from The Spirits Business by Nicola Carruthers
https://www.thespiritsbusiness.com/2017/08/conigliaro-debuts-cocktail-bar-in-cognac/

Jim Beam releases vanilla-flavoured Bourbon

Beam Suntory has expanded its Jim Beam Bourbon range with the launch of a vanilla-flavoured expression in the US.
Jim Beam Vanilla blends Madagascar vanilla bean liqueur with Kentucky straight Bourbon whiskey.
Bottled at 70 proof, the new expression has hints of “oak and caramel” Bourbon notes, and a “sweet vanilla” aroma.
Bartenders who received early samples of the product have suggested mixing Jim Beam Vanilla with cola and a cherry garnish.
Jim Beam’s global brand partner actress Mila Kunis will be featured in social and digital content around the official campaign launch this autumn.
“I’m thrilled to collaborate with my friends in Kentucky to debut Jim Beam Vanilla,” said Kunis. “If you’re like me, you love the taste of Bourbon but are sometimes looking for something a little different. Jim Beam Vanilla is perfect when I want a touch of flavour.”
Jim Beam’s seventh generation master distiller Fred Noe, added: “Jim Beam pioneered flavours in the Bourbon category several years ago and the trend has continued to grow. We are always innovating, and are proud to offer a variety of flavours in our portfolio.”
The new expression joins the brand’s flavoured portfolio including Apple, Kentucky Fire, Honey and Red Stag by Jim Beam Black Cherry.

An article from The Spirits Business by Nicola Carruthers
https://www.thespiritsbusiness.com/2017/08/jim-beam-releases-vanilla-flavoured-bourbon/

‘Grain-to-glass’ distillery opens in Oxford

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A new ‘grain-to-glass’ distillery has opened in the UK city of Oxford, claiming to be the only distillery in the world to use populations of sustainably grown ancient heritage grains
The Oxford Artisan Distillery (TOAD), which opens its doors to the public today (27 July), will produce a range of spirits including gin, absinthe, vodka and rye whiskey. It claims to be one of only a handful of distilleries in the UK to prepare its own neutral spirit on site.
TOAD uses genetically diverse populations of rye, wheat and barley grown exclusively for the distillery on farms within a 50-mile radius of Oxford.
The ancient heritage grains were revived by archaeo-botanist John Letts and grown sustainably in ways last used in the 19th century in 150 acres of bio-diverse fields, known as land races, close to Oxford.
TOAD founder Tom Nicolson said: “Intensive farming has had a catastrophic effect on wildlife. It depletes the soil and contributes to global warming.
“Scientists are also linking pesticides to illnesses such as cancer, diabetes, Parkinson’s and Alzheimer’s. There has never been a more urgent need to explore less toxic and more nurturing ways of growing our food.”
TOAD approached Paul Pridham from South Devon Railway to produce their first still. Pridham’s team created two stills: Nautilus (2,200 litre) and Nemo (500 litre), named after Jules Verne’s fictional submarine and its captain. An 18th century Grade II-listed threshing barn will initially house TOAD’s casks and grain, with plans for a new barn to house the distillery.
Together with two five-metre, 40-plate copper distillation columns, TOAD anticipates the stills will produce around 1,000 bottles of gin and 750 bottles of rye whiskey from every tonne of grain.
Nicolson added: “So many things are mass-produced – we at TOAD are trying to break the mould. We are entirely focused on creating really great spirits while fighting for the heart and soul of true craft distilling and taking our time to get it right every step of the way.
“We really care about provenance and it’s our devotion to craft distilling which will, I believe, mark the difference between us and other distilleries.”
There are also plans for a visitor centre and restaurant at the distillery site in South Parks.

An article from The Spirits Business by Nicola Carruthers
https://www.thespiritsbusiness.com/2017/07/grain-to-glass-distillery-opens-in-oxford/

Rémy Cointreau hails ‘excellent’ first quarter

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French drinks group Rémy Cointreau saw its first quarter sales rise by 9.9% to €240.2 million (US$276m), driven by strong Cognac gains in China.
Geographically, Asia Pacific posted an “excellent” performance in the company’s fiscal 2017/18 first quarter, with strong performance in Greater China, Singapore and improvement in Japan.
The group cited “remarkable” performance of its Cognac brands, with an organic sales growth of 18.7%. Sales were benefited by “highly favourable” trends in Continental China and an improved environment in Macao, Hong Kong and Japan.
In addition, the company attributed the results to a “rich” set of initiatives, including the Louis XII limited edition expression The Legacy and the release of Rémy Martin XO Cannes 2017 in travel retail.
The recent acquisitions of the Domaine des Hautes Glaces and Westland distilleries also made a “favourable contribution” in the period.
Sales from the Liqueurs & Spirits division – comprising Cointreau, Metaxa, Mount Gay, St-Rémy, and the Islay Spirits including Bruichladdich – reported 1.9% decline in organic sales, negatively impacted by the Passoa JV deal with Lucas Bols, struck in December 2016. Rémy Cointreau said the development masked the strong growth of the division’s brands up 7% in the first quarter.
Cointreau’s sales were fuelled by a “robust” performance in its main market, the US, as well as Greater China and Russia.
Greek spirit Metaxa witnessed strong momentum, due to the success of its 12 Stars campaign and improved trends in travel retail.
Mount Gay rum and St Rémy brandy also returned to growth in the period, led by positive trends in the US.
Islay Spirits (Bruichladdich, Port Charlotte and Octomore Scotch plus The Botanist Gin) maintained strong growth in Q1 boosted by the success of The Botanist Gin.
“Strengthened by this positive start to the year – Rémy Cointreau confirms its guidance of growth in current operating profit over the financial year 2017/18, assuming constant exchange rates and consolidation scope,” the statement read.
The company added that the first quarter does not traditionally make a significant contribution to annual sales.

An article from The Spirits Business by Nicola Carruthers
https://www.thespiritsbusiness.com/2017/07/remy-cointreau-hails-excellent-first-quarter/