From mezcal margaritas to orange whiskey: Pernod Ricard on driving on-premise recovery

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/fotostorm
Pic:getty/fotostorm

Related tags: Pernod ricard, spirits, Champagne

Tequila, mezcal and whiskey are booming in the on-premise. John Barrett, Chief Commercial Officer at Pernod Ricard USA, looks at the trends as the channel continues to recover from the pandemic.

2022 trends

Premiumization continues to dominate top trends, whether this be across spirits or neighboring categories.

“We’ve seen an explosion in the popularity of premium agave-based spirits, like tequila and mezcal, and it shows no signs of slowing down given its role in some of the most signature cocktails on the market right now including Ranch Water and variations of the margarita that include mezcal in lieu of tequila,” ​said Barrett.

“We’ve seen our tequila and agave brands such as Avion, Altos, and Del Maguey, continue to grow, and in turn, we expect tequila drinks will continue to be popular request at bars and restaurants for the foreseeable future.

“North American whiskies are also becoming more popular with a growing market of whiskey-curious consumers who are drawn to its history and its vibrance as a category. American whiskey volume in the U.S. has been accelerating over the last decade, shooting up from 16 million 9-liter cases in 2011 to 29.7 million in 2021, according to the Distilled Spirits Council. Exports of American whiskey also have been enjoying strong growth, with annual sales now exceeding 20 million cases.”

Flavored whiskies also have a role to play: with Barrett reporting that the launch of Jameson Orange has been a hit with traditional whiskey drinkers looking for a new take on the spirit, as well as engaging ‘whiskey curious’ consumers who are looking to explore a new category.

Outside of spirits, Champagne is also a premium category to watch.

“Given its traditional role in supporting celebratory occasions, the explosive growth of champagne during the pandemic came as a surprise for many. Now as we enter post-pandemic times, consumer demand for elevating convivial engagements with champagne continues to be at an all-time high. With Pernod Ricard’s sparkling and champagne portfolio spanning from Perrier Jouet Belle Epoque and GH Mumm to Mumm Napa and Campo Viejo Cava, we are excited for this trend to continue and to meet consumer needs for their moments of conviviality.”

RTDs

RTDs have been booming in the off-trade: with fruity, lighter flavors suited to outside or on-the-go occasions. Recent RTD innovations from Jameson, Absolut and Malibu have been building on these trends.

But with their key selling points being around portability and convenience, do they really have the chance to build traction in the on-trade? Yes, says Barrett.

“Pernod Ricard is all about meeting consumers where they are both on- or off-trade. As one of the fastest-growing spirits category in the industry, we’re confident that the interest in RTDs will continue as people return to on-premise consumption.

“We’re known for premium spirits that provide the highest quality cocktails and we carry that through everything we do. From our first RTD launch, we’ve focused our innovations on providing consumers with bar-quality cocktails all with the pull of a tab. We’re very meticulous and meaningful about the RTD innovations we create, down to the liquid development, ingredient selection and testing in order to get to the right final formula.

“As consumers return to the on-premise, we do expect to see bars, restaurants, and clubs selectively offering these convenient and enjoyable options that not only taste delicious, but make a great option especially for drinks-to-go, where state laws permit. Our innovation pipeline is exploring how we can make ready-to-drink and ready-to-serve cocktails faster and more convenient for bartenders.”

malibu rtd

Post-pandemic potential

The pandemic saw consumers get creative with cocktails at home. This, in turn, can benefit the on-trade recovery, says Barrett.

“Rather than competing with the on-trade, we see the at-home mixology trend as informing how consumers will behave in the on-trade.

“Consumers who recreated bar experiences at-home saw the value in premium spirits, explored a variety of new and emerging categories and discovered an appetite for more complex flavors and experiences. When returning to the on-trade, consumers will continue this trend by seeking elevated experiences with high-quality spirits, such as Avion Cristalino. After working on their own mixology skills, consumers also have a greater appreciation for the knowledge and expertise bartenders and hospitality staff bring to the on-premise experience and will rely on them to guide their drink choices.

“We believe consumers will surely discover a new balance of both the on- and off-premise and Pernod Ricard will continue to bring new innovations to consumers and support for on-premise operators to enhance these moments of conviviality.”

The big question, of course, is how the future of the on-trade is shaping up after the massive hit – and continuing reverberations and uncertainty – of the pandemic.

“We are optimistic about the success of the on-trade in the coming year,” ​says Barrett.

“If there’s anything that the pandemic has demonstrated, it is how resilient this industry is to potential challenges that lie ahead of them. Our role is to provide support to on-premise operators to drive traffic and improve the experience for everyone with cocktail ideas and occasion-based programming. We’re also maximizing efforts across our portfolio by developing relevant selling stories that leverage consumer insights and drive more impactful and meaningful on-premise moments for consumers with our brands.

“As we look to the future, we remain optimistic that our industry can and will get through this and that is because of the resilience of bar and restaurant owners. We’ll continue to stand with them and support them.”

Supporting the on-premise recovery

Bar owners continue to face challenges such as labor shortages, supply chain constraints and inflation.

"At Pernod Ricard, supporting the on-premise community is at the core of what we do," says Barrett. "The last two years, we have donated $200,000 to the Restaurant Worker’s Community Foundation to help support bars and restaurants on their recovery journey.

"We are also supporting the on-trade through brand initiatives. Most recently, Absolut, one of our flagship brands, continued its 40+ year allyship to the LGBTQ+ community with an on-going initiative, Out & Open​. The program celebrated the safe spaces created by LGBTQ+ bars and restaurants and raised awareness as well as funds to help protect these community pillars that are facing rising closure rates, in partnership with the National LGBT Chamber of Commerce (NGLCC).

"Brand marketing is one of the simple but effective ways we can encourage on-premise activity and drum up excitement for our brands and cocktails. Malibu’s “Welcome to Malibu” campaign and Absolut’s “The World of Absolut Cocktails. Born to Mix” campaign continue to elevate Pernod Ricard’s efforts to drive traffic and improve the experience for everyone with relevant stories, cocktail ideas and meaningful moments of conviviality on-trade."

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