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By Dominique Vidalon
PARIS, March 9 (Reuters) - French spirits group Pernod
Ricard is monitoring the so-called hard seltzer market
before deciding whether to jump on the accelerating bandwagon,
the CEO of Pernod Ricard North America said on Tuesday.
Hard seltzer - flavoured sparkling water infused with
alcohol - is the fastest growing alcohol category in the United
States, with sales in stores roughly doubling every year since
2016.
"From an opportunity perspective in our portfolio, there is
no doubt that hard seltzer is on fire," Ann Mukherjee told
analysts during a call on the group's North American operations.
"I think it's partly because it's convenient, it's
low-calory. It could be really right for ready-to-drink
cocktails and we continue to look at our brands - Malibu,
Absolut - to see how it all plays out."
Pernod rival Diageo has already made its intentions
clear, announcing on Monday that it has acquired Far West
Spirits, parent company of Lone River Ranch Water, as it looks
to expand in the hard seltzer category.
"This is one we are watching and if it continues to rise and
allows spirits penetration to increase, this is a space we would
definitely double down on," Mukherjee said of the hard seltzer
market, though it was unclear whether the intention would be to
acquire existing players or develop its products derived from
its own brands.
Mukherjee also told analysts she was confident that trends
seen during the COVID-19 crisis would continue once the pandemic
is over.
Among those trends was growing demand from locked down
consumers for cocktails and higher-priced spirits, which helped
to boost first-half sales by 5% in its U.S. market.
"COVID opened up consumers eyes to the fact they could enjoy
really special drinks," she said, adding that she expects demand
for premium products to continue rising for home use and away
from home once the pandemic recedes.
In the United States, there are opportunities to further
accelerate sales of Martell cognac while the company aims to
stabilise sales of Absolut vodka in the short-term, she added.
Absolut vodka sales in the United States have been hit by
competition from other brands as well as the closure of bars and
restaurants during coronavirus lockdowns.
(Reporting by Dominique Vidalon
Editing by David Goodman)
