Unleashing the Power of Precision: Pernod Ricard's Strategic Investments Revolutionize Marketing Effectiveness

Pernod Ricard has enhanced its data analytics tools to gain greater precision and improve the optimization of its marketing spend. This investment in technology and data capabilities has allowed the renowned drinks manufacturer, known for brands like Jameson, Malibu, and Absolut, to optimize the efficiency of its marketing and promotional activities.

These tools, such as Maestria and Vista Rev-Up, assist the business in developing a portfolio strategy by analyzing consumer data and identifying consumption moments. Additionally, the company is using the Matrix tool to optimize investment across touchpoints and brands, resulting in a more efficient use of marketing spend. "We will enhance our strategic planning and execution on a global scale," stated CEO Alexandre Ricard during today's (31 August) investor call.

Pernod Ricard has made continuous efforts to enhance its digital transformation since 2020. As its rival, Diageo, has been vocal about the advantages derived from its investment in proprietary effectiveness tools like Catalyst, Pernod Ricard is also dedicated to improving its data capabilities. The company aims to enrich its consumer reach and maximize its investment by enhancing technology and data proficiency.

The company's advertising and promotional expenditure for its fiscal year 2023, which ended in June, reached a "record" level of €1.94bn (£1.66bn), compared to €1.70bn (£1.46bn) in the previous year. However, this investment remained consistent with the previous year when considering the ratio to sales. Advertising and promotional expenditure accounted for 16% of sales in the company's 2023 year, compared to 15.9% in 2022.

This aligns with the company's February forecast, where Ricard informed investors that he expected marketing expenditure as a percentage of sales to remain steady, while emphasizing that the return on investment in this area would be significantly higher. This prediction was driven by the company's digital transformation initiatives.

As part of the broader organizational changes within the company, highlighted today are the investments in data and technology, known as 'Project Tomorrow'. This initiative, led by Ricard, aims to enhance the company's responsiveness to ever-changing market conditions. Moreover, the company has restructured its leadership framework to ensure more accurate strategic planning and execution of brand activations worldwide.

Alexandre Ricard, CEO of Pernod Ricard, outlined three key principles driving the company's transformation: streamlining processes, ensuring disciplined execution, and fostering a culture of empowerment among its teams. Ricard referred to this approach as "freedom in a framework," where autonomy is encouraged while maintaining a strong connection to the company.

The reorganisation announced by the company marks a significant step towards its continued growth. CEO Ricard celebrated the success of the strategy, describing the past financial year as "very strong".

In its full year of 2023, Pernod Ricard achieved a remarkable 10% increase in net sales, amounting to €12.14bn (£10.41bn). Price increases accounted for 8% of this growth, while a more profitable product mix contributed 1%. Despite the challenges posed by inflation, the company experienced a modest 1% growth in volumes.

In the UK, the company experienced a 2% rise in sales. Notably, Jameson, Kahlua, Absolut, and Malibu exhibited robust performance with double-digit sales growth. However, the impact on volumes in the UK was not specified, as the market has generally been influenced by inflation resulting in a shift in consumer sentiment.