How Pernod Ricard Converts Consumer Data Into On-the-Ground Execution
The BevAlc consumer landscape is quickly shifting, with the spirits market slowing down as a result of economic moderation and subdued consumer confidence, according to Pernod Ricard CEO Alexandre Ricard.
During the company's earnings conversation, Ricard highlighted key consumer behavior trends shaping the global industry and how Pernod Ricard has been responding to keep up with shopper needs.
"The name of the game in a way is really speed and agility. Consumers have always changed over time. I would say the major difference here is the speed at which they change," says Ricard.
The company has been leveraging data and tech capabilities, and simplifying its organization, to introduce a more agile way of working. This includes turning consumer insights into faster execution to keep up with the quick pace of change.
"We have identified, along with our consumer insight teams around the world, a number of consumer insights, which all are translating into tangible on-the-ground execution and activation," says Ricard.
Convenience & RTDs
Pernod Ricard said there is a high demand for easy, quick options in cluttered, time-pressured environments. This is exemplified by a surge in spirits-based ready-to-drink (RTD) products, multipacks, 100 ml "fun-sized" formats and mini formats.
A driver of this is also the economic climate, with inflation pushing down consumer confidence and discretionary spending, forcing shoppers to seek out what the company calls "affordable premiumization."
Spirits Exploration & Novelty
Gen Z, in particular, is interested in expanding its choices across categories. There's high consumer interest in new flavors and unique formats, such as recent innovations that Pernod Ricard scaled with its Malibu and Absolut brands.
"Skrewball and Malibu sell-out are improving, helped by strong success of smaller formats and innovation, particularly Malibu Pink, which is turning out to be a big success this summer," said Ricard.
Mindful Moderation
Due to the growing trend of health and wellness, there's a move toward a "drink less but better" lifestyle, increasing demand for premiumization, lower-ABV products, non-alcoholic options and lighter aperitif occasions.
Craving Connections & Experiences
The company also identified market opportunities in response to a shift from spontaneous hangouts toward planned, intentional and meaningful experience-driven events.
The Expanding Emerging Middle Class
Expanding population dynamics are fueling long-term alcohol consumption trends across global regions, with a specific focus on the middle class.
Status-Driven Premiumization
The company states there is strong consumer appetite in emerging markets for elevated status symbols and higher-tier premium spirit propositions.
As a result, Pernod Ricard has been investing significantly in convenience and affordability within its revenue growth management capabilities as well as through evolved media targeting to shift focus toward the most active and most efficient media channels.
"Over the time, we have been really focusing on simplifying our organization for further agility. We have been also intensifying our efficiency program," said Ricard. "We have been doing so without jeopardizing on our ability to invest behind our digital transformation that we believe is also going to fuel further in the future opportunities."
This article was originally published by P2PI sibling brand Consumer Goods Technology.
