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MARKETING/DESIGN/CONSUMER TRENDS/INSPIRATIONS Cognac & Brandy News for Consumers & Industry Experts

World-Wide Cognac Sales: Premium French Cognacs Such As Pernod’s Martell Are Selling Well In Emerging Markets While U.S. Market Remains “Fragile”

 
 

Pernod’s “more premium, emerging-market and cognac-skewed portfolio” may attract investors more than Diageo, said Simon Hales, an analyst at Evolution Securities. Purchases of higher- priced spirits, which contribute more to profit margins than cheaper alcohol, are increasing in markets such as China.

“People are coming back to premiumization,” Ron Anderson, Diageo’s chief customer officer, said in an interview July 15. “In the developing markets, we’re nearly back to where we were.” Recovery in the developed markets of North America and western Europe is “fragile,” Diageo said May 6.

Diageo Plc, the world’s largest liquor maker, may report slower profit growth than rival Pernod Ricard SA as greater reliance on a stagnant U.S. market reduces the British company’s ability to increase prices.

The maker of Johnnie Walker whiskey will probably say tomorrow that organic operating profit rose 2.3 percent in the year ended June 2010, according to the median estimate of four analysts surveyed by Bloomberg News. Pernod, the owner of Martell cognac, may post a 4 percent increase in earnings when it reports on Sept. 2, the same survey showed.

London-based Diageo gets about 40 percent of operating profit from North America, where beverage companies have cut prices to maintain brand loyalty as consumers shift toward cheaper alcohol. That compares with about 25 percent for Pernod, which derives a larger proportion of revenue from the Asia- Pacific region, where spirit purchases have rebounded.

For more:  http://www.bloomberg.com/news/2010-08-24/diageo-profit-growth-to-trail-pernod-as-u-s-consumers-shun-premium-liquor.html

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This entry was posted on August 25, 2010 by in Cognacs, Martell, Pernod-Ricard, Sales and tagged , , , , , .
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