Pernod Ricard, the renowned French spirits producer, anticipates a triple increase in its sales within the Indian market over the next decade. This growth is projected to be driven by favorable macroeconomic trends, a positive demographic dividend, and the increasing preference for premiumization in Indian-made foreign liquor (IMFL) and imported brands.a Jean Touboul, Managing Director of Pernod Ricard India, envisions that the Indian market, presently positioned as the second-largest globally, holds the potential to ascend to a leadership position in the next 10-15 years, potentially surpassing the US market for the company.
“We are growing faster with the tailwinds in macroeconomics, in demographic and well India being the most populous country on earth, I am personally convinced that yes, we will be the market number one in Pernod Ricard at some point,” said Touboul.
However, he also added, “I just cannot tell you if it will be in 10 years, 15 years, that is not easy to predict but my conviction is that yes, one day India will be the market number one for Pernod Ricard.”
According to him, Pernod Ricard is experiencing double-digit growth for both Indian-made foreign liquor (IMFL) and robust double-digit growth for imported products in this market.
“As far as the net sales are concerned, it is obviously a key market in the current state of play and even more important for the growth and future results of the group because there is no doubt that India is a market that is extremely favourable,” he said.
Touboul also highlighted the intricacies of Indian regulations related to the alcohol trade, describing them as “complex.” He emphasized the necessity for simplifying these regulations to facilitate smoother business operations in the country.
“We are on the trajectory where we want to be able to triple our net sales in the next decade. That is our ambition. And to do that, we will go to more innovation,” he said.
Pernod Ricard boasts a global portfolio featuring more than 200 premium brands, including notable names like 100 Pipers, Chivas Regal, The Glenlivet, Absolut, Havana Club, and Jacob’s Creek. In addition to these, the company owns Indian-made foreign liquor (IMFL) brands such as Blenders Pride, Imperial Blue, and Royal Stag.
At present, Pernod Ricard’s Indian-made foreign liquor (IMFL) brand accounts for nearly 95 percent of its volumes and over 80 percent of its net sales.
“Today, the vast majority of our business in the Indian alcohol market is in the IMFL. That is also where we are particularly strong with our three main brands- Imperial Blue, Royal Stag and Blenders Pride.
“And we are enjoying historically double-digit growth with these brands as they are delivering quite well for us and for the Pernod Ricard group,” Touboul said.
As per Touboul, there is a growing demand among Indians for higher-quality beverages, and Pernod Ricard is committed to providing them with an expanded range of premium-quality products.
“There is premiumisation because the revenue per capita is increasing and it is a natural evolution for consumers when they have more revenue to push their consumption towards a better product with higher price point increases as well,” he said.
“We are here to go with this trend and as much as possible accelerate by proposing an ever more product of great quality and that helps consumers to trade up,” he said.
As part of the premiumisation drive Pernod Ricard will continue to innovate on the core brands – Imperial Blue, Blender’s Pride and Royal Stag.
“We will regularly come with line extensions for these products to again propose within this Seagram quality type of product, some diversified experience with diversified taste, diversified finish, whatever twist we put on the product to be able to provide the various experiences to our consumers,” he added.
It would have a process of continuous innovation and investment behind brands and look at other initiatives for expanding its portfolio, as it is launching a new Indian single malt Longitude 77.
Continue Exploring: Pernod Ricard unveils its first made-in-India single malt, Longitude77
“There is space to develop more and more premium products, which are also made in India. Our Indian single malt is a great example of that. We are at a price point which is parity with an international single malt of 12 years old, like Glenlivet 12 in our case because we know we are producing a very qualitative product in India,” he said.
Pernod Ricard is the owner of Chivas Brothers, a prominent Scotch whisky maker renowned for its popular single malt and blended Scotch whisky brands such as Chivas Regal, Ballantine’s, Royal Salute, and The Glenlivet. The company anticipates that a potential Free Trade Agreement (FTA) between the UK and India could be mutually beneficial for both nations.
It will help “develop the possibility in particular to import more qualitative product to India at a more reasonable price” and would be more accessible for a bigger part of the Indian population.
Moreover, if duty is waived on bulk imports of Scotch, it will help IMFL also.
“The IMFL that we do, we use Indian grain spirits and we mix that with Scotch malt that we import from Scotland obviously. So that is something that where we could have a benefit if there are lower custom duties on that part of the business,” he said.