Pernod Ricard bets on China's evolving consumer tastes

Pernod Ricard, the French spirits and champagne group, will deepen its footprint in China by capitalizing on growing demand for whisky, vodka, gin and tequila, amid a global shift toward premium and experience-driven consumption, according to a senior executive.

The Paris-headquartered company is also considering expanding exports of its The Chuan pure malt whisky — distilled and bottled in Southwest China's Sichuan province and already available in certain travel retail channels across Asia — to more overseas markets in the future.

Gilles Bogaert, executive vice-president for global markets at Pernod Ricard, said China remains central to the group's portfolio strategy because of its scale, innovation capacity and increasingly sophisticated consumers.

"China is already one of our largest markets and will remain a key pillar of growth for many years to come," the French executive said in an interview during the ongoing eighth China International Import Expo (CIIE) in Shanghai.

Bogaert said the company, which is participating in the CIIE for the eighth time, sees significant potential in the globalization of tequila — a category that has historically been concentrated in Mexico and the United States.

"At the group level, we recognized the need to strengthen our portfolio to participate in tequila's international expansion," he said.

"The global appeal of the category is a relatively new phenomenon and, once we identified that opportunity, we acted on it."

This strategy led to Pernod Ricard's recent acquisition of Codigo 1530, a Mexico-based premium tequila brand, which the group expects will help capture growth in emerging markets worldwide.

Established in 1975, Pernod Ricard has a comprehensive portfolio in the industry, with over 200 spirit and champagne brands, including Martell Cognac, Chivas Regal, Ballantine's and Perrier-Jouet distributed in 160 countries and regions.

Bogaert said that beyond its core cognac business, the group will deploy more resources to develop Chinese whisky, expanding its portfolio of premium brands, and investing in new and emerging consumption channels and occasions to drive future growth.

The Chuan malt whisky distillery in Sichuan province — Pernod Ricard's first malt whisky facility in China — exemplifies this approach by combining international craftsmanship with Chinese terroir and heritage.

"We will remain focused on markets around China at the initial stage," said Bogaert. "But in the future, I see no reason why it couldn't be sold in major whisky markets in Europe, such as France and the United Kingdom, through specialized channels.

"Japanese whisky began in a similar way. It was not accessible through many channels, it was a bit scarce, and it created some buzz communities over there," he added.