The end of July saw Diageo post its full results for fiscal 2024, the 12 months to the end of June. Fast forward to last week, and Pernod Ricard announced its figures for the same period.
While the former came in technically flat (-0.6%), the latter’s 1% sales decrease was only just behind its arch rival’s 12-month performance. While there is clear disparity in size – in sales terms, Diageo is around 43% larger than Pernod Ricard – the pair’s growth rates, with the exception of fiscals 2021-2023, have been very much in line over the past decade.
There’s no getting away from the fact that the spirits industry is in something of a mire right now. Of the listed multinational brand owners, almost all – Campari Group is the notable exception – are struggling to deliver year-on-year growth with any kind of consistency. Meanwhile, some companies, namely Moët Hennessy and Rémy Cointreau, are seeing their exposure in the cognac category hit particularly hard.
Diageo and Pernod Ricard are not immune to the wider pressures on spirits. A closer look at their brand match-ups by segment offers little in the way of cheer.
The best times for gin this century seem to be behind it – a claim widely accepted by brand owners, who now know the size of their consumer pool has stopped growing. Beefeater and Tanqueray both slid in fiscal 2024, although the former appears to be stronger on the premiumisation slide; the pair were neck and neck in volumes declines.
Over in rum, we’re seeing the first major divergence, with Havana Club earning star-billing in Pernod Ricard’s results announcement. The Cuban join-venture (with the country’s state-owned Cuba Ron entity) performed all the more impressively when one considers its 17% slump in volumes. There’s clearly a case-study on premiumisation worth studying here.
Indeed, with higher-end rum set to become an exciting battleground thanks to Brown-Forman’s purchase of Venezuela’s Diplomático in late 2022 and Diageo’s move for Don Papa from the Philippines a few months later, some classroom time wouldn’t go amiss in the weeks and months ahead.
There’s little to write home about in scotch whisky for both companies, though a tip of the hat is due to Pernod Ricard for Royal Salute’s sales lift (how much this was down to the bounceback of the global travel retail channel more broadly will become clearer in the next round of results). Even the ‘worst’ performer in Johnnie Walker isn’t as bad as it looks, given the scotch category’s -7.6% sales showing in the US’s Control States so far this year.
‘Steady as it goes’ remains the mantra for vodka, where low-single-digit declines in the current consumer climate isn’t too concerning. That said, Diageo will be very unhappy with Cîroc’s full-year sales tumble of just over a quarter. While there will have been sighs of relief from the group’s London headquarters that the brand’s longstanding association with Sean ‘Diddy’ Combs is finally behind it, where next for the premium-plus vodka brand?
