Pernod Ricard’s CEO has stressed the importance of “data-driven insight”, rather than being led by “perception” when it comes to assessing the impact of trends like moderation on the company’s brands.
Moderation of alcohol consumption, particularly among Gen Z, has been framed as a major threat to the future growth of spirit companies like Pernod Ricard, which owns brands including Malibu, Jameson and Kahlua.
However, speaking during Pernod Ricard’s full-year results today (28 August), CEO Alexandre Ricard pointed to data that suggested otherwise. He explained the company’s decisions are based on data rather than its own judgement. The idea is to avoid having an “emotional debate” on the moderation trend.
Pernod Ricard’s CEO has stressed the importance of “data-driven insight”, rather than being led by “perception” when it comes to assessing the impact of trends like moderation on the company’s brands.
Moderation of alcohol consumption, particularly among Gen Z, has been framed as a major threat to the future growth of spirit companies like Pernod Ricard, which owns brands including Malibu, Jameson and Kahlua.
However, speaking during Pernod Ricard’s full-year results today (28 August), CEO Alexandre Ricard pointed to data that suggested otherwise. He explained the company’s decisions are based on data rather than its own judgement. The idea is to avoid having an “emotional debate” on the moderation trend.
“It’s important to specify data-driven insight, not perception, or perceived-driven insight,” Ricard said.
One datapoint, sourced from Ipsos, found Gen Z consumption of alcohol increased by four percentage points from 40% during the second quarter of 2024, to 44% during the second quarter of 2025.
We strongly believe that moderation is driven by economic moderation, in other words, purchasing power.
Alexandre Ricard, Pernod Ricard
“One of the most important data we follow in terms of brand saliency and equity is household penetration,” Ricard added.
He claimed data indicated household penetration for both the total beverage alcohol category and for spirits specifically had increased among Gen Z.
Pernod Ricard is not dismissive of the notion of moderation altogether, the CEO noted. The company believes consumers are buying into the idea of drinking “less but better”, which is playing into the firm’s long-term premiumisation strategy.
Moderation is also being driven by ongoing macro trends, Ricard claimed.
“We strongly believe that moderation is driven by economic moderation, in other words, purchasing power,” he said.
The suggestion is consumers are choosing to cut down on spending in bars, restaurants and on alcohol in general as they feel their discretionary spending power decrease as the cost of living rises.
Continued ‘strategic conviction’
Fiscal 2025 was a year Pernod Ricard felt the impact of a lack of consumer confidence more generally. In the year ending 30 June 2025, organic sales fell 3% year-on-year. This was mainly driven by weaker mix, with the company managing to drive 2% volume growth in the year.
The business highlighted “economic and cyclical challenges” in some of its key markets as key issues to contend with.
“It’s the US and China where we have weaker consumer confidence, which is leading to subdued or even weak consumer demand,” Ricard said.
However, he added the company has “strategic conviction” in its push towards long-term trends like premiumisation, as well as in its ability to deliver on consumer needs.
A one time per year budget is not longer valid in today’s world.
Alexandre Ricard, Pernod Ricard
While Pernod Ricard has “conviction” in its overall strategy, a key theme from its presentation to investors was agility in how it executes.
“Volatility is here to stay,” Ricard asserted.
While Pernod Ricard anticipates its advertising and promotional spend will stay consistent at roughly 16% of net sales (which has been constant in recent years), it aims to be agile in how it deploys its resources.
“A one time per year budget is no longer valid in today’s world,” Ricard said.
The business utilises tools such as Maestria, tech which helps the business form a portfolio strategy by mapping consumption moments through consumer data, and Vista Rev-Up, which helps Pernod Ricard map its promotional opportunities and increase return on investment. From a marketing effectiveness point of view, the business also uses a tool called Matrix, designed to maximise the return on its marketing spend.
Pernod Ricard to step up brand activations in each market despite declining sales
Pernod Ricard is also seeing potential for generative AI, not just for cost saving but “more importantly” from an impact point of view. The drinks giant has two campaigns generated through AI up and running, one in Poland and one in Brazil, the results of which are proving “pretty strong”.
While it is keeping marketing investment as a percentage of net sales consistent, Pernod Ricard claimed strong returns on that spend had been generated.
Despite falling sales in the last financial year, the business also called out its strong long-term brand health.
“We measure brand equity on a consistent basis, many times a year. At the very least quarterly, if not in some cases even monthly,” Ricard said.
Avoiding ‘newness for newness’s sake’
Innovation was also signposted as a cornerstone of Pernod Ricard’s plans for future growth. Ready-to-drink (RTD) beverages have been a bright spot for the company and generally a category in growth, while the overall spirits market has declined.
In the US, the business expects to triple its RTD presence over the next three years. Pernod Ricard signposted upcoming new product launches, including a collaboration between coconut rum brand Malibu and pineapple juice brand Dole.
Ricard emphasised the impact of brand partnerships or “co-branding”, something that has been particularly notable in the company’s RTD strategy. For example, as well as this upcoming collaboration with Dole on Malibu, vodka brand Absolut has partnered with brands including Sprite and cranberry juice Ocean Spray.
Combining two powerful brand names is a recipe for success, Ricard noted, adding that these deliver “relevant” and impactful new products to consumers.
That’s something that’s central to the innovation strategy, he said.
“Consumers like newness, but they don’t like newness for newness’s sake,” he said. “They like relevant newness or newness that they feel engaged with.”
