Jameson posts 16% sales growth in H1

The on-trade continued to suffer from volume and value declines during 2010 in an alcohol market where the off-trade benefitted from a significant reduction in cross-border trade, according to a briefing note from Irish Distillers parent Pernod Ricard for the six months to 31st December 2010.

In the dynamic, competitive and growing off-trade sector, IDL’s portfolio of spirits out-performed the market during this six month period.

Jameson posted a very strong performance with “double digit” growth reflecting the strength of the brand in this market while Powers Irish Whiskey increased sales year-on-year, gaining market share, claimed IDL.

Absolut vodka virtually doubled its sales here during the six months,  benefitting from a consistently high level of marketing and sponsorship investment: the Absolut Fringe Festival in Dublin, Absolut at the Galway Arts Festival and a strong sales drive led to uptake in the on-trade sector.

Pernod Ricard’s strategic wine brands Jacob’s Creek, Brancott Estate (formerly Montana) and Campo Viejo all posted strong growth in a very competitive market here. Globally, the four Priority Premium Wine brands (comprising five per cent of Pernod Ricard’s sales) posted volume and sales growth of three per cent.This represented the first return to volume growth since the first half of 2007/08.

Commenting on IDL’s H1 performance (from July to December), IDL Chairman & Chief Executive Alexandre Ricard said, “This six-month period has proven to be one of the most dynamic and successful periods ever for Jameson as it reached two key milestones on its journey to become one of the world’s top spirit brands. Globally, Jameson sold over three million cases in 2010 and one million of these are consumed in its most important export market, the USA.

“The progress of Jameson within the Pernod Ricard family of brands has been one of our company’s great success stories, growing from 466,000 cases when Irish Distillers joined Pernod Ricard in 1988, to one  million in 1996, two million in 2006 and achieving sales of over three million in 2010.

?“The success of this brand is a great testament to the power of the Pernod Ricard business model of a decentralised structure and decision-making.  The combination of the Jameson brand-owner focus, energy and investment, allied to the commitment and passion of the people in the Pernod Ricard distribution network, continues to prove an unbeatable combination.”

IDL announced a major expansion plan for its warehousing and maturation capacity in 2010.   This development will be located at Dungourney, County Cork, subject to the normal planning process (already underway).
 
Alexandre Ricard believes that Jameson, as one of Ireland’s most successful exports, “is playing its role in the export-led recovery which this country, this economy needs so badly at this juncture.  As a product that is distilled, matured and bottled in Ireland, a very significant proportion of all the inputs required to produce, distribute, sell and market Jameson are Irish – from raw materials to packaging, manufacturing jobs, sales and marketing resources and shipping.  As this Irish brand continues to grow in its 100-plus markets around the world, I can only see extra jobs and extra benefits for the Irish economy flowing from this success”.

However he expressed concern over performance and outlook on the Irish market.
 
While he acknowledged the very positive impact that the 20 per cent reduction in excise duty had on the spirits market in 2010 by repatriating much of the purchases lost to cross-border shopping and helping stabilise the off-trade market in particular, the hospitality sector – primarily pubs – continued to suffer badly with a sales decline of 14 per cent in 2010.

“All stakeholders in this important sector for jobs and tourism must be cognisant of their policy decisions and actions, and their impact,” he stated, “What we in Irish Distillers need to achieve with the very ambitious global goals we have set ourselves for Jameson, is a sustainable, jobs-oriented home market where we can work with Government to deliver on our export and job targets”.

Globally, sales of Jameson accelerated appreciably in H1, with volumes up by 16 per cent – one of its best performances ever.
The sales value for the brand again grew faster than volume, achieving an impressive 18 per cent growth.  Premiumisation of the brand with consistent value ahead of volume growth, is one of PR’s key objectives for the brand which achieved overall sales of 3.17 million cases in the 2010 calendar year.

Growth of Jameson in the US, its largest export market, accelerated to 27 per cent and the key industry publication there Market Watch named it as its Spirits Brand of the Year.

Other key markets contributing to Jameson’s accelerated growth in the first six months included Russia, Ukraine, Canada,Travel Retail, France and Ireland.

Overall, 37 of the brand’s 100 export markets contributed double digit growth.  As a key Premium Brand in the Pernod Ricard portfolio, Jameson benefits from a strategic level of investment in consumer marketing.  Between July 2010 and July 2011 over €80 million will be spent on advertising and promoting Jameson around the world – a €10 million increase on last year.
In late 2010, Jameson launched a new international print advertising campaign, ‘Easy-going Irish’, initially in Ireland and Russia which is now being rolled out in other key markets around the world.
 
Pernod Ricard’s overall sales grew by seven per cent organically to €4.28 billion in the last six months of 2010 (compared to €3.79 billion in the same six months in 2009) leading to a significant reduction in debt for the French drinks conglomerate to €9.7 billion.

Strong Asian growth coupled with an improvement in economic conditions globally in the second six months of 2010 led to Pernod Ricard increasing its profit targets for the year.