French spirits company Pernod Ricard is optimistic about its growth prospects in India for the upcoming fiscal year. Despite experiencing a slower growth rate in the first half of 2024, the company expects a rebound in sales, driven by signs of domestic economic recovery and consumers’ increasing willingness to spend on high-value products. Pernod Ricard’s CEO, Jean Touboul, believes that premiumization will continue to be a significant factor in driving growth in the Indian market.
Pernod Ricard’s Indian arm reported a 4% growth in sales during the first half of the ongoing fiscal year. This growth rate was lower than the company’s usual long-term growth, primarily due to softer premiumization among consumers. However, Pernod Ricard expects growth to return to its low double-digit trajectory in the next fiscal year (2025).
Pernod Ricard’s market position in India is strong, with the company controlling about a fourth of the country’s whiskey market, valued at $21.13 billion. Despite having a negligible presence in the mass segment, Pernod Ricard’s premium and semi-premium brands, such as Chivas Regal, Glenlivet, and Absolut, contribute significantly to its sales in India.
To further strengthen its presence in India, Pernod Ricard has signed a memorandum of understanding with the Maharashtra government to establish a malt spirit distillery in Nagpur. The company plans to invest up to €200 million (₹1,794 crore) over the next decade in this project. Once completed, the distillery will be one of the largest in India, capable of producing up to 60,000 litres of malt spirit per day. This investment reflects Pernod Ricard’s commitment to India as a key strategic market.
RTM Watch’s Take
Pernod Ricard’s positive outlook for India’s market aligns with the country’s economic recovery and consumers’ increasing willingness to spend on premium products. The company’s focus on premiumization and its investment in a malt spirit distillery demonstrate its commitment to capturing the long-term potential of the Indian market. As Pernod Ricard continues to strengthen its position in India, it will be interesting to see how it leverages its portfolio of premium and semi-premium brands to drive growth and maintain its market share.
