Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Investor Day (May 2012)
196 slides from Pernod Ricard Sa's investor day presentation, May 29, 2012
Slide 1: Capital Market Day 29-30 May 2012
Capital Market Day 29-30 May 2012
Slide 2: Gavin Hewitt, Scotch Whisky Association
Gavin Hewitt Chief Executive, Scotch Whisky Association
Slide 3: Scotch Whisky's footprint
Scotch Whisky’s footprint 108 distilleries located across Scotland 50 Speyside distilleries 50 other sites – bottling, cooperages, coppersmiths, warehousing, etc 35,000 jobs depend on Scotch Whisky in Scotland
Slide 4: Scotch Whisky's renaissance
Scotch Whisky’s renaissance Made only in Scotland Enjoyed in 200 countries 20 more distilleries today than 10 years ago £1bn investment in last 4 years
Slide 5: An export business
An export business Outsells US (3 times), Canadian (4.5 times) 93% of sales overseas Record exports of £4.23bn in 2011 Success in US and France, but also LATAM and Asia
Slide 6: Value - £ millions - 2002 to 2011
Value - £ millions - 2002 to 2011 £ Sterling Millions 4,500 4,000 4,226 3,500 3,448 3,000 3,135 3,057 2,825 2,500 2,479 2,285 2,375 2,370 2,000 2,263 1,500 1,000 500 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 7: +27% +31% +45% +48% +44%
+27% +31% +45% +48% +44%
Slide 8: Volume - LPA millions - 2002 to 2011
Volume - LPA millions - 2002 to 2011 LPA Millions 400 350 354 300 318 302 304 297 295 273 278 250 264 267 200 150 100 50 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 9: The appeal of Scotch Whisky
The appeal of Scotch Whisky Strong premium brands Provenance, quality and integrity Aspirational status Versatile mixed drink ‘Badge’ of success
Slide 10: Protecting Scotch Whisky
Protecting Scotch Whisky Defending Scotch Whisky as a drink coming from Scotland 5 SWA in-house lawyers 70 plus court actions ongoing
Slide 11: Glen Highland
GLEN HIGHLAND Blonded Whisky PINE SINGLE PURE HIGHLAND MALT WHISKY
Slide 12: Growing international success
Growing international success Securing fair market access 600+ barriers to trade Priority: removal of 150% Indian import tariff
Slide 13: Minimum Unit Pricing
Minimum Unit Pricing Each unit of alcohol must be sold no lower than minimum unit price Scottish Government plans 50p a unit Minimum price: 70cl = £14, 1 litre = £20
Slide 14: SWA opposes MUP
SWA opposes MUP Critical threat to industry success Will not address misuse An illegal barrier to trade for 30 years Scottish precedent would allow ‘health justified’ trade barriers in third markets
Slide 15: MUP - ineffective, illegal and erects trade barrier
MUP – ineffective, illegal and erects trade barrier No fall in hazardous and harmful drinkers EC has consistently ruled against MUP Encourages protectionist trade barriers
Slide 16: MUP - a legal alternative
MUP – a legal alternative All alcohol to be taxed at approximately same rate Tax based legal floor price: no sales below excise duty and VAT Would deliver £1bn a year extra revenue to Government
Slide 17: Conclusion
Conclusion A positive future for Scotch Whisky Investment underpins that future A premium global drink Export success - £134 a second
Slide 18: Chivas Brothers: A Strong Growth Engine to Create Value
Christian Porta, CEO Chivas Brothers CHIVAS BROTHERS A Strong Growth Engine to Create Value 18
Slide 19: Agenda
Agenda Chivas Brothers Introduction Scotch whisky: A Dynamic Category Creating Value The Most Complete and Best Adapted Portfolio with Sustained Innovation and Investment Conclusions 19
Slide 20: A legacy of history and tradition
A legacy of history and tradition 1953 1909 1801 Royal Salute Chivas Regal 1827 Chivas Brothers Ballantine’s 1824 The Glenlivet 20
Slide 21: Chivas Brothers
Chivas Brothers 30 SITES: • 15 Scotch distilleries, 2 gin distilleries Scotland • 2 bottling facilities • Over 300 warehouses Over 6 million casks of aging inventory London Plymouth 21
Slide 22: Agenda
Agenda Chivas Brothers Introduction Scotch whisky: A Dynamic Category Creating Value The Most Complete and Best Adapted Portfolio with Sustained Innovation and Investment Conclusions 22
Slide 23: Scotch whisky: the largest international category
Scotch whisky: the largest international category Source: Volume IWSR 2010 International Western Style Spirits
Slide 24: Scotch whisky: growth vs international western style spirits
Scotch whisky: Growth vs international western style spirits 09/10 Volume Variance +3.7% +3.5% Source: Volume IWSR 24
Slide 25: Scotch whisky: the largest international category
Scotch whisky: the largest international category *CAAP = Contribution after advertising and promotion Source: Value IWSR 2010 International Western Style Spirits 25
Slide 26: Growth driven by the more premium & dynamic segments
Growth driven by the more premium & dynamic segments 09/10 22.8% 25.0% 05/10 CAGR Var 20.0% 15.0% 11.7% 8.5% 8.0% 10.0% 4.1% 4.8% 5.0% 0.2% 1.8% 0.0% Standard/ Super Super Ultra Premium Premium Premium Premium Prestige Malt Ultra Prestige Source Volume IWSR / PR Marketview 26
Slide 27: Strong value proposition
Strong value proposition GLOBAL SCOTCH SEGMENTS VOLUME GLOBAL SCOTCH SEGMENTS VALUE 2% 15% 23% 24% 39% 40% 34% 22% STANDARD PREMIUM SUPER PREMIUM ULTRA/PRESTIGE Source IWSR / PR Market view 2010 27
Slide 28: Premiumising in mature and emerging markets
Premiumising in mature and emerging markets Super premium and above % of total Scotch Source Volume IWSR / PR Marketview 28
Slide 29: Growth under-pinned by strong economic and consumer trend foundations
Growth under-pinned by strong economic and consumer trend foundations Category aligned to economic growth in developing markets and stable in developed markets Vast source of volume as consumers trade up from traditional local spirits Extensive range offer creating value at entry level and aga
Slide 30: A category with strong potential for Pernod Ricard
A category with strong potential for Pernod Ricard Strong consumption trends driven by economic and consumer levers Category Dynamics: Growing price A virtuous circle for power and ability to High barriers to entry significant players premiumise Supply-demand Limited balance turning number of more a
Slide 31: Agenda
Agenda Chivas Brothers Introduction Scotch whisky: A Dynamic Category Creating Value The Most Complete and Best Adapted Portfolio with Sustained Innovation and Investment Conclusions 31
Slide 32: A portfolio from standard to luxury
A portfolio from standard to luxury Standard Premium Super Premium Ultra Premium / Prestige $10-16 $17-25 $26-41 $42-84 / $84+ Ballantine’s Finest, Clan Chivas Regal 12 Chivas Regal 18 & 25 Passport, 100 Pipers, Ballantine’s 17, 21, Limited, 30 & 40 Long John Campbell, Something Special Ballantine’s
Slide 33: A category with strong potential for Pernod Ricard
A category with strong potential for Pernod Ricard Acquisition by Pernod Ricard Variance since acquisition 4.9m 791K +75% +134% 2.8m + + 330K MAT Mar 12 MAT Mar 12 6.3m 206K +19% + +243% + 5.3m 60K MAT Mar 12 MAT Mar 12 33
Slide 34: Two in the top 5 Scotch brands
Two in the top 5 Scotch brands Volume Growth Brand Company Rank 09/10 1 Johnnie Walker Diageo +8.5% 2 Ballantine’s Pernod Ricard +3.5% 3 Grants Scotch William Grant +2.8% 4 Chivas Regal Pernod Ricard +8.9% 5 J&B Diageo -4.5% Source: IWSR 2010 34
Slide 35: CBL: leader in fastest growing and most valuable segments
CBL: leader in fastest growing and most valuable segments Var Chivas Brothers Chivas Brothers Segment 09/10 Share Ranking All Scotch 4.0% 21% #2 Standard/Premium 1.8% 18% #2 Super-Premium 8.5% 28% #2 Ultra Premium/Prestige/ 22.8% 46% #1 Ultra Prestige Scotch aged 21YO 54.0% >85% #1 and above Source
Slide 36: Value creation delivered through improved pricing and mix
Value creation delivered through improved pricing and mix ROW/DF Full Year 2010/11 First nine months 2011/12 Vol Net Sales Vol Net Sales Ballantine’s 7% 8% 0% 1% Chivas Regal 7% 9% 8% 12% The Glenlivet 13% 14% 13% 18% Royal Salute 24% 27% 21% 24% Source: Pernod Ricard 36
Slide 37: A portfolio capturing value globally
A portfolio capturing value globally CHIVAS BROTHERS SCOTCH VALUE PROFILE 24% EUROPE (Excl. 45% France) FRANCE AMERICAS 12% ASIA/ROW 19% Source: Pernod Ricard Net Sales June 2011 37
Slide 38: Strong growth in emerging markets, stable in mature
Strong growth in emerging markets, stable in mature 157.3 Volume growth CAGR +10% of Top 4 strategic Scotch brands indexed on 2006 levels CAGR +0.3% 101.4 Source: Pernod Ricard 38
Slide 39: A portfolio driven by innovation and premiumisation
A portfolio driven by innovation and premiumisation 39
Slide 40: Chivas Regal
Chivas Regal Capital Market Day Scotland 2012
Slide 41: Building the world's most iconic Scotch whisky
Building the world’s most iconic Scotch whisky Chivas Regal is the World’s No 2 Scotch by value* The original luxury Scotch whisky and world famous Taken from 2.8m 9lc in FY2002 to historical high of 4.9m** 9lc (+6% CAGR) Achieved 1m** 9lc in Global Travel Retail, almost 1 in 5 bottles globally *Imp
Slide 42: Live With Chivalry - a compelling campaign
Live With Chivalry - a compelling campaign A bold point of view based on a key consumer insight Differentiating and highly ownable campaign Inspiring to the urban communities in developed and emerging markets Communicated with scale and consistency Conceived in 2008, it continues to disrupt and recr
Slide 43: Live With Chivalry - Real Friends campaign
Live With Chivalry - Real Friends campaign A fully integrated campaign with digital at the heart 60” TRAILER 30” TRAILER Two beautifully shot and engaging short films shot by Academy Award® winning filmmaker, Joachim Back Print OOH Over 3.5 Million views on You Tube and Digital seeding programme chi
Slide 44: Chivas Regal 18 - A flagship of premiumisation
Chivas Regal 18 – A flagship of premiumisation Outright leader of ultra premium Scotch whisky, tenfold increase since relaunch in 2004, volume increased to more than 300,000 9lc Significant momentum, +23% net sales in FY2011, especially in emerging markets e.g. China, Vietnam, Asia Duty Free Success
Slide 45: Chivas Regal 25 - Building Fame
Chivas Regal 25 – Building Fame Return of the ‘original’ Chivas Regal at global launch in New York in 2007 Significant halo, building fame for the brand and driving value: +70% net sales in FY2011 Cannes Film Festival sponsorship since 2009 hosting media and VIP guests from 20 countries annually Fil
Slide 46: Ballantine's
Ballantine’s Capital Market Day Scotland 2012
Slide 47: Ballantine's - Leaving a creative global impression
Ballantine’s – Leaving a creative global impression World’s No 2 Scotch whisky by volume with the most comprehensive range from premium to ultra-prestige Leading brand of ultra-premium and prestige in Asia Global platform ‘Leave an Impression’ is built on an engaging human insight and provides a con
Slide 48: Plan Ballantine's - A global campaign for Ballantine's Finest
Plan Ballantine’s – A global campaign for Ballantine’s Finest Extremely effective campaigns in emerging markets where there is strong growth for Ballantine’s Finest e.g. Brazil, Mexico, Poland, Russia Strong digital activation targeted towards young adults Successful music activation in Spain helpin
Slide 49: Ballantine's - Strong ultra premium and prestige range
Ballantine’s – Strong ultra premium and prestige range Premiumisation through product innovation Annual Christmas Reserve limited edition launched in 2010 Ballantine’s 17 Signature Distillery Editions underlining product credentials at price premium in Korea and Asia Duty Free Ballantine’s 40 Year O
Slide 50: Ballantine's - Leadership of ultra premium & above in Asia
Ballantine’s – Leadership of ultra premium & above in Asia Ballantine’s Championship: Major platform across Asia since 2008 High profile European Tour event, extremely strong correlation with key consumers in main markets e.g. Korea, China 45,000 spectators, broadcast to 300 million homes worldwide
Slide 51: Royal Salute
Royal Salute Capital Market Day Scotland 2012
Slide 52: Royal Salute - Activating true luxury
Royal Salute – Activating true luxury Luxury Scotch and leading 21 YO, Royal Salute starts where other whiskies end Significant growth +27% net sales in FY2011 making it the fastest growing strategic brand within Pernod Ricard Strong growth in Asia combined with an international development programm
Slide 53: Royal Salute - For 'Today's Kings'
Royal Salute – For ‘Today’s Kings’ Confident print advertising plays on unmistakable and iconic packaging ‘Today’s Kings’ TV advertising launched in China in early 2012 “The Journey Begins Where Others End” tagline emphasises prestige and aged credentials 53
Slide 54: Royal Salute - Diamond Jubilee activity
Royal Salute – Diamond Jubilee activity From June 2012, Royal Salute will be the first ever brand to be officially associated with the Royal Gun Salutes at the Tower of London Inaugural event at the Thames Diamond Jubilee Pageant - 60 VIP and media guests Royal Salute Diamond Jubilee Limited Edition
Slide 55: The Glenlivet
The Glenlivet tHe GLENLIVET Capital Market Day Scotland 2012
Slide 56: The Single Malt That Started It All
The Single Malt That Started It All Often imitated, never equalled, The Glenlivet has left an enduring legacy Famous for the flawless quality that defined the Speyside region No 2 single malt globally, +134%* since acquisition in 2002 Biggest contributor to single malt category volume growth in last
Slide 57: The Glenlivet - range development
The Glenlivet – range development Strong pipeline of innovation - Cult reference in Nàdurra - ‘Natural’ un-chill-filtered range - ‘Excellence’ entry reference in Asia with premium cues and pricing - Master Distillers Reserve ‘three wood’ concept in Travel Retail ‘broke World Duty Free malt sales rec
Slide 58: The Glenlivet - driving advocacy via word of mouth
The Glenlivet – driving advocacy via word of mouth Connecting with consumers digitally….. … via mentoring ….and via over 100,000 ‘Guardian’s of the Glenlivet’ brand advocates in 120 countries 58
Slide 59: Passport
Passport Capital Market Day Scotland 2012 se "oral [ : PASSPORT SCOTCH } ——
Slide 60: Passport - Exciting 'Scotch entry' brand
Passport – Exciting ‘Scotch entry’ brand Top 20* Scotch, passed 1m 9l cases in 2011** Targeted at emerging middle classes, distinctive brand with heritage and excitement for consumers entering the Scotch category from local spirits Strong emerging market exposure: No 3 standard Scotch in BRIM market
Slide 61: Sustained investments for future growth
Sustained investments for future growth Chivas Brothers invests an average of £40m annually in capital expenditure Significant past projects include: Reopening of Allt-a-bhainne distillery (2005) Innovative equipment and processes developed to handle, fill, seal and label the unique Royal Salute 50%
Slide 62: Malt whisky distillation
Malt whisky distillation Major investment in malt whisky distillation capacity continues with a 25% increase planned over 2012/2013 - Expansion at Glenallachie, Glentauchers, Tormore and Longmorn - Re-opening of Glen Keith Includes heat recovery technology, making stills 25% more efficient Investmen
Slide 63: Luxury bottling
Luxury bottling As leaders in luxury Scotch, Chivas Brothers invests to deliver the very highest standard in Scotch packaging A new ultra premium bottling hall created at Paisley will be opened in Summer 2012 Emphasis on hand-bottling prestige/ultra-prestige editions such as Chivas Regal 25, Royal S
Slide 64: Inventory
Inventory Chivas Brothers holds an enviable inventory of over 6m casks with significant high aged stocks We annually purchase significant volumes of high quality ex- bourbon and ex-sherry casks The substantial increase in distillation will allow Chivas Brothers to meet future demand for its brands 6
Slide 65: The value of age
The value of age As an industry leader we recognise we have a vital role to play in empowering consumers to make an informed choice Compelling research* shows that while 90% of consumers believe age is an indicator of quality, only 10% understand what the number on the bottle actually means Research
Slide 66: Campaign - Phase one (2010/11)
Campaign – Phase one (2010/11) We have launched a campaign to educate consumers and their buying choices Phase one started the debate Activity in key trade channels (Travel Retail) and with key influencers 66
Slide 67: Outstanding results - global awareness
Outstanding results – global awareness Launched in over 30 markets worldwide 67
Slide 68: Campaign - Phase 2 (2012)
Campaign – Phase 2 (2012) Targeting the consumer 68
Slide 69: Agenda
Agenda Chivas Brothers Introduction Scotch whisky: A Dynamic Category Creating Value The Most Complete and Best Adapted Portfolio with Sustained Innovation and Investment Conclusions 69
Slide 70: The Global Category
The Global Category… The most global category, present on every continent Strong opportunity for further global growth, especially at super premium and above level 70
Slide 71: Pernod Ricard's most profitable and cash generative
…and Pernod Ricard’s most profitable and cash generative Scotch whisky is the most profitable category and the strongest cash generator for Pernod Ricard with approximately 30% of the total CAAP* and cash generation 150 90% 140 130 85% 120 Pernod Ricard’s 110 80% 100 outlook 90 75% 80 70 70% FY10/11
Slide 72: Our Formula for Value Growth
Our Formula for Value Growth A Clear Geographic Strategy • Maintain and premiumise stronghold in Western Europe • Continue to grow strongly in Asia, Eastern Europe and the Middle East • Fast track development in the Americas, especially Latin America, and Africa → Capitalising on strong growth of mi
Slide 73: Scotch Whisky, Our Ambition
Scotch Whisky, Our Ambition To beat category value growth, and achieve high single to double digit value growth 73
Slide 74: Clear leader on the world largest Scotch Whisky market
César Giron, CEO Pernod France Clear leader on the world largest Scotch Whisky market
Slide 75: Contents
Contents • Scotch whisky in France: a unique opportunity for the indisputable leader • Ballantine’s: how to stand out in a mature market • Aberlour confirms its leadership 75
Slide 76: Scotch Whisky is a dynamic category in its 1st market worldwide
Scotch whisky in France: a unique opportunity for the indisputable leader Scotch Whisky is a dynamic category in its 1st market worldwide 1 France: the 1st Scotch Whisky 2 A dynamic category market worldwide in value in a flat spirit market* 128 11% 126 8% 120 46% 9% 113 7% 107 118 119 5% 115 5% 107
Slide 77: The indisputable leader
Scotch whisky in France: a unique opportunity for the indisputable leader The indisputable leader 1 Scotch Whisky: the largest category 2 Pernod Ricard: a leading share in France* in the most profitable segments Total Super Ultra SOM Scotch Standard Premium Prestige Premium Premium 30% Whisky 15% 44
Slide 78: Contents
Contents • Scotch whisky in France: a unique opportunity for the indisputable leader • Ballantine’s: how to stand out in a mature market • Aberlour confirms its leadership 78
Slide 79: Capturing growth without increasing promotional pressure
Ballantine’s: how to stand out in a mature market Capturing growth without increasing promotional pressure… Ballantine’s and J&B promotion rate and SOM (value) on Blended under 12yo category 8.9 9.0 8.7 8.1 8.2 8.2 46 42 36 6.6 32 6.7 6.6 6.7 6.4 25 27 6.3 23 24 24 22 22 20 05/06 06/07 07/08 08/09 0
Slide 80: Developing a premium range
Ballantine’s: how to stand out in a mature market … and developing a premium range Source: Nielsen, MAT P2 2012, SOM (volume) on blended <12yo 80
Slide 81: A strategy based on 3 key stakes
Ballantine’s: how to stand out in a mature market A strategy based on 3 key stakes On/ Off Trade Among Brand Equity Recruitment Premiumisation Glorifying whisky “drinkers” 81
Slide 82: Glorifying Ballantine's in On- and Off-trade
Ballantine’s: how to stand out in a mature market Glorifying Ballantine’s in On- and Off-trade Qualitative POS material & impactful displays Qualified & motivated to maximise visibility salesforces 82
Slide 83: Recruitment in the off-trade channel
Ballantine’s: how to stand out in a mature market Recruitment in the off-trade channel 12.8 % Penetration rate 12.2 11.8 Source: AC Nielsen 83
Slide 84: Turning Ballantine's into an iconic & prestigious brand
Ballantine’s: how to stand out in a mature market Turning Ballantine’s into an iconic & prestigious brand Creativity & Modernity Quality Artistic partnership (BTL / On trade) The Art of Blending “L’Esprit d’assemblage” Communication International around blending “L’art de la Awards : dégustation” “B
Slide 85: A major achievement: 1 Million cases
Ballantine’s: how to stand out in a mature market A major achievement 1 Million 9-litre cases achieved in FY10/11 and celebrated in Scotland with all Pernod employees 85
Slide 86: Key stakes for the coming years
Ballantine’s: how to stand out in a mature market Key stakes for the coming years: how to go further? Leader’s role: develop the Recruitment category & through… Innovation 86
Slide 87: Recruitment outside the category
Ballantine’s: how to stand out in a mature market 4th stake: Recruitment outside the category Engage : Recruit Young Legal Drinking Age consumers Young entrepreneurs activation Party People Recruitment / Recruit through innovation Watch the movie Watch the movie 87
Slide 88: Recruitment outside the category
Ballantine’s: how to stand out in a mature market 4th stake: Recruitment outside the category Engage : Recruit Young Legal Drinking Age consumers Young entrepreneurs activation Party People Recruitment / Recruit through innovation Watch the movie Watch the movie 88
Slide 89: Contents
Contents • Scotch whisky in France: a unique opportunity for the indisputable leader • Ballantine’s: how to stand out in a mature market • Aberlour confirms its leadership 89
Slide 90: France: one of the leading markets for Malts
Aberlour confirms its leadership France: one of the leading markets for Malts Scotch Malt Whisky in volume USA Other 17% Countries World Duty 35% Free 14% UK Taiwan 12% 10% France 12% Source: IWSR 2010 90
Slide 91: #1 malt brand in France
Aberlour confirms its leadership #1 malt brand in France ABERLOUR widens the gap versus competition 15.7 15.9 15.6 15.5 15.3 15.4 15.6 15.2 14.8 15.4 15.4 15.3 15.0 13.9 13.8 ABERLOUR 13.5 13.5 13.3 Concurrent 1 Concurrent 2 8.8 8.6 8.5 8.4 8.4 8.1 8.0 8.0 7.9 MAT P12 MAT P2 MAT P5 MAT P8 MAT P11 MA
Slide 92: Our know-how is proving efficient in the malt category
Aberlour confirms its leadership Our know-how is proving efficient in the malt category Volume in KL Know-how in developing volume Know -how in creating value Source: Pernod depletions 92
Slide 93: Consistent strategy on value creation
Aberlour confirms its leadership Consistent strategy on value creation Advertising & New products PR Campaigns Innovation Premiumisation Education Glorifying Revamp of the range 2010 Aberlour Hunting Club Aberlour 12 yo Media non chilled filtered Off-trade Launched 2011 displays On-trade Aberlour 20
Slide 94: To develop brand desirability
Aberlour confirms its leadership Premiumisation To develop brand desirability Glorifying Aberlour Hunting Club Advertising On-trade displays 94
Slide 95: Innovation
Aberlour confirms its leadership Innovation Aberlour Hunting Club On-trade displays 95
Slide 96: Consumer education process
Aberlour confirms its leadership Consumer education process PR programs Aberlour’s complete range : engaging the consumer to become an expert Core Malt Limited editions Brand Ambassador 96
Slide 97: Key stakes for the coming years
Aberlour confirms its leadership Key stakes for the coming years: how to widen the gap? Aberlour: THE indisputable #1 malt in France Innovation Core Malt … recruit among whisky drinkers … upgrade consumer loyalty & demand 97
Slide 98: Key take-aways
Scotch whisky in France: a unique opportunity Key take-aways France is the 1st Scotch Whisky market worldwide in value Scotch Whisky is the 1st spirit category in France The category is growing and gaining share (in a flat French spirit market) Capitalizing on its incomparable portfolio and it
Slide 99: Our ambition
Scotch whisky in France: a unique opportunity Our ambition Sustain our leadership Continue to drive innovation flow (position & behavior) in Build further category image & recruit beyond its the largest Scotch Whisky boundaries market worldwide Outpace the overall growth of the blended categor
Slide 100: China: creating value in Scotch
Horace Ngai, Deputy Managing Director PR China China: creating value in Scotch
Slide 101: Agenda
Agenda ₋ The indisputable leader in a very promising market ₋ Future sources of growth to reinforce our leadership ₋ The rising Middle and Affluent Consumers (MAC) ₋ The emerging High Net Worth Individual (HNWI) ₋ The most attractive Scotch Whisky portfolio ₋ Our ambition 101
Slide 102: Large untapped potential of Scotch Whisky
Large untapped potential of Scotch Whisky The second imported The most dynamic With huge potential spirits category category over last 10 years 1.9M Past 3M Change CAGR(1) Imported Spirits: cases Penetration(2) ‘11 vs ‘07 5M cases Whisky + 28% 6% +2 pts 1% 10% 38% 52% Cognac + 20% 7% +3 pts BaiJiu:
Slide 103: Scotch Whisky - Huge premiumization potential
Scotch Whisky - Huge premiumization potential Ultra Premium & Prestige Driving strong value growth segments growing fast 2% 4% CAGR 5% +19% 10% 16% +37% 16% Prestige >€100 83% 78% -2% Ultra Premium €40-100 Super Premium €20-40 65% Premium <€20 10% 8% 0% 3% 09/10 11/12 Volume 11/12 Source : PRC Marke
Slide 104: PR China - The indisputable leader in volume
PR China - The indisputable leader in volume An undeniable leadership Recently further enhanced 1M cases 1.1 PR International Competitor 1 13% PR 1.0 0.9 International PR Scotch: +3% CAGR 31% 56% Competitor 1 0.8 M cases Others 0.7 International Competitor 1: 0% CAGR 0.6 0.5 MAT Volume Share 0.4 MAT
Slide 105: PR China - The indisputable leader in value
PR China – The indisputable leader in value …based on absolute leadership in Even larger leadership in value… most profitable segments PR Ultra Premium Prestige 11% €40-100 >€100 8% 1% 27% 9% 62% International 17% competitor 1 83% 82% Others Total Scotch Whisky value share Volume Share Source : PRC
Slide 106: Agenda
Agenda ₋ The indisputable leader in a very promising market ₋ Future sources of growth to reinforce our leadership ₋ The rising Middle and Affluent Consumers (MAC) ₋ The emerging High Net Worth Individual (HNWI) ₋ The most attractive Scotch Whisky portfolio ₋ Our ambition 106
Slide 107: MAC growth drives Scotch Whisky growth
MAC growth drives Scotch Whisky growth MAC expansion… …enlarges consumer base for Scotch 199 CAGR Whisky Market (M cs) 2.2 CAGR 200 14% 5% MAC population (M) 1.9 1.6 150 135 97 100 50 0 09 11 14 09 11 14 Note: 1. MAC stands for Middle and Affluent Consumers 2. CAGR 11-14 107
Slide 108: MAC growth results into geographic expansion
MAC growth results into geographic expansion… Number of cities (>100K MAC) Cities/Counties with >100K MAC 2010 247 2015 576 2020 851 108
Slide 109: Best potential lies in tier 3&4 cities
…and best potential lies in tier 3&4 cities CAGR CAGR 2,500 14% Whisky Market (M cs) 5% 199 2.2 200 MAC population (M) Tier 1 28 7% 2,000 1.9 23% Tier 1 2% 1.6 150 50 Tier 2 25% 135 12% 1,500 23 27% Tier 2 39% 97 3% 100 36 1,000 41% 19 Tier 3/4 43% 28 121 17% 50 500 38% Tier 3/4 75 34% 9% 50 30% 0 0
Slide 110: PR China's RTM is an unchallenged competitive advantage
PR China’s RTM is an unchallenged competitive advantage 6 domestic regions with >400 cities covered Largest network with “First Mover” advantage >550 Sales reps further enhanced, with and >1700 Promoters geographic expansion programs (>100 cities) The widest & deepest coverage in the industry 110
Slide 111: Agenda
Agenda ₋ The indisputable leader in a very promising market ₋ Future sources of growth to reinforce our leadership ₋ The rising Middle and Affluent Consumers (MAC) ₋ The emerging High Net Worth Individual (HNWI) ₋ The most attractive Scotch Whisky portfolio ₋ Our ambition 111
Slide 112: China will be the world's No.1 luxury market from 2015
HNWI growth will drive premiumisation HNWI Population x2.5 6.2M China will be the world’s No.1 luxury market x2.2 2.5M from 2015 0.9M 2010 2015 2020 HNWI: owns >10 million RMB excl. primary residence 112
Slide 113: PR China leveraging unique assets to capture HNWI growth
PR China leveraging unique assets to capture HNWI growth Pernod Ricard brands Dedicated luxury RTM have the best luxury image (1) with specialised team 1. Royal Salute VIP consumer oriented model Multi-Brand portfolio approach 2. Chivas Regal Leverage existing Elite Club Database 3. Ballantine
Slide 114: Agenda
Agenda ₋ The indisputable leader in a very promising market ₋ Future sources of growth to reinforce our leadership ₋ The rising Middle and Affluent Consumers (MAC) ₋ The emerging High Net Worth Individual (HNWI) ₋ The most attractive Scotch Whisky portfolio ₋ Our ambition 114
Slide 115: Four brands to cover key consumer opportunities
Four brands to cover key consumer opportunities The Pioneering Leader (Lead Category Expansion) The Leading Luxury Spirit The Whisky for Personal Expression (Convert from other Prestige+ Spirit) (Premiumise The Category) The Ultimate Single Malt (Beyond Blended Whisky) 115
Slide 116: Cornerstone of imported spirits & leading whisky expansion
Cornerstone of imported spirits & leading whisky expansion Drive Whisky Expansion via geo Accelerate value creation via Grow brand advocates through Key expansion, beer drinker premiumisation & Innovation trend-setters & key opinion Strategies conversion and new drinking behind CR J&J, CR 18 and CR
Slide 117: Become the Scotch icon of personal expression
Become the Scotch icon of personal expression BRAND Build strong discernment of Drive brand affinity & Key VISION Drive brand preference & brand image through the Golf premiumisation in all touch Strategies uniqueness through CRM Platform points (ATL & BTL)/ channels Core Initiatives 117
Slide 118: Emerge as a true luxury whisky for prestige spirit drinkers
Emerge as a true luxury whisky for prestige spirit drinkers BRAND Build prestige image via Recruit prestige drinkers with Key Build strong luxury credential VISION new advertising campaign & strong visibility at all touch among HNWI Strategies polo platform points Core Initiatives 118
Slide 119: The single malt reference in China
The single malt reference in China Build word of mouth & malt Key Establish premium image & the Nurture long term relationship with credential through key opinion Strategies leaders & malt experts malt reference through TGL malt lovers & early adopters via “Excellence” launch Digital & CRM Core Init
Slide 120: Agenda
Agenda ₋ The indisputable leader in a very promising market ₋ Future sources of growth to reinforce our leadership ₋ The rising Middle and Affluent Consumers (MAC) ₋ The emerging High Net Worth Individual (HNWI) ₋ The most attractive Scotch Whisky portfolio ₋ Our ambition 120
Slide 121: Sustain double-digit value growth
China – Our ambition Very promising market with strong growth potential Sustain Undisputed #1 position with absolute leadership in Ultra-Premium/Prestige segments, the most dynamic double-digit and profitable value growth Best-in-class RTM to capture opportunities from rising of our MAC to HNW
Slide 122: Scotch Whisky potential in Russia
Eric Laborde, Managing Director Pernod Ricard Eastern Europe Scotch Whisky potential in Russia
Slide 123: A promising and very profitable market
Scotch Whisky Potential in Russia A promising and very profitable market Positive mid-term economic outlook and High economic reliance on oil/gas no significant political risk Toughening of legal environment Strengthening of legal protection when Anti-alcohol plan Stronger grip over alco
Slide 124: Positive consumer dynamics fueling premiumisation
Scotch Whisky Potential in Russia Positive consumer dynamics fueling premiumisation Level of consumer confidence restored after the crisis Strong growth of middle class expected in the coming 5 years A very virtuous double trading up phenomenon Increasing purchasing power in regions Growing
Slide 125: The middle class: key engine for IWSS development
Scotch Whisky Potential in Russia The middle class: key engine for IWSS(1) development 50 250 IWSS Market (million liters) 39 40 40 38 200 36 36 36 37 171 Total Middle Class Households 1 31 157 30 143 150 Income > 15,000$ PPP Substantial increase 128 of the middle/upper IWSS Market (Millions Liters)
Slide 126: Huge conversion opportunity
Scotch Whisky Potential in Russia Huge conversion opportunity “Local” versus “imported” spirits CAGR 06/10 Local Spirits -4% (1) 270 321 275 Impressive growth 0.2% 0.5% 1.3% of imported spirits, CAGR 06/10 though from a small base 99.8% 99.5% 98.7% Imported spirits +22% 2001 2006 2010 (Millions of 9
Slide 127: Drink repertoire evolution
Scotch Whisky Potential in Russia Drink repertoire evolution Drink Repertoire 28 Drink imported spirits Major evolution of 83 drinks repertoire when Russian 72 consumer is growing revenues Drink only local spirits 17 Average Affluent Russian Spirits Consumer Consumer Source: TGI urban Russia, TGI Pr
Slide 128: Whisky: the most dynamic category
Scotch Whisky Potential in Russia Whisky: the most dynamic category M 9L cases CAGR % 5 4.1 Gin 6% 4 3.4 Bitters / Spirit 14% Aperitifs 3 Tequila 22% 2 Cognac / Armagnac 9% 1.2 2.9 1 2.3 Rum 18% 0.5 0.6 Whisky 0 0.2 33% 2001 2005 2010 2011(E) Total Market 24% Source: IWSR 2011 report, Nielsen; IWSS
Slide 129: Amazing growth at all price points
Scotch Whisky Potential in Russia Amazing growth at all price points K 9L cases 3,500 Premium + Whisky UltraPremium 2,873 vs. Total Whisky 3,000 2,500 2,264 Super 50% Volume Premium + Standard Premium 2,000 1,714 1,564 Premium 1,500 1,296 70% Value Premium + Standard 774 Standard 1,000 587 263 353 5
Slide 130: Pernod Ricard Rouss has the best Premium Whisky portfolio
Scotch Whisky Potential in Russia Pernod Ricard Rouss has the best Premium Whisky portfolio The Icon leading the Super Premium + The only True Luxury Unconventionally Premium Whisky to challenge Premium Scotch Whisky leader The Single Tackling the lower tier of the Malt Choice middle class opportuni
Slide 131: A brand portfolio targeting various consumer profiles
Scotch Whisky Potential in Russia A brand portfolio targeting various consumer profiles Income 15% From standard to luxury, Discerning Men brands addressing a wide range of 13% consumers’ needs Ambitious Socials (New) 10% Party People 9% Aspiring Socials 2%* 24% Young Occasionals Lifecycle Regular G
Slide 132: A whisky portfolio covering all price points
Scotch Whisky Potential in Russia A whisky portfolio covering all price points Retail Price (Rub*) 12,838 14,710 26,436 4,698 5,916 3,773 3,843 2,543 2,772 1,520 1,825 1,222 1,351 Super Single Ultra 705 739 Premium Premium Malts Premium Prestige Standard 1 * 1 EUR = 38.67 RUB as of 3rd May 2012 Sour
Slide 133: Brand portfolio aligned with key whisky drinking occasions
Scotch Whisky Potential in Russia A brand portfolio well aligned with key whisky drinking occasions 35 Whisky volume share (%) Night out Relax 30 Major Needs: Major Needs: Have Fun Switch Off Warm Up 25 Impress 20 Major Need: Stand Out 15 Bond & Connect Major Need: 10 Reward Casual Connection with M
Slide 134: Differentiated activation strategies for specific targets
Scotch Whisky Potential in Russia Differentiated 360 activation strategies for specific targets Print Ad Events Digital Off Trade Print Ad Events Digital On Trade Cannes In Store Ad Creative Promo POSM GWP 134
Slide 135: Brand portfolio leveraged across On-Trade outlets
Scotch Whisky Potential in Russia Brand portfolio leveraged differently according to the On-Trade outlets Drinking Dining Entertainment Airport Elite Lounge Clubs Leading / Iconic Cannes Premium Mainstream 135
Slide 136: Brand portfolio leveraged across Off-Trade outlets
Scotch Whisky Potential in Russia Brand portfolio leveraged differently according to the Off-Trade outlets Premium Tsum Aroma Standard Magnoliya, Perekrestok Metro, 7th Continent Auchan Economy Pyaterochka Drinking Class of outlet Volume Size 136
Slide 137: Constantly growing SOM
Scotch Whisky Potential in Russia Constantly growing SOM Premium Super Premium Ultra Premium 37.2 46.2 44.4 37.5 30.4 34.8 35.0 CHIVAS 12 CHIVAS 18 26.3 JW RED LABEL 39.5 39.0 JAMESON 20.3 JW BLACK 17.1 33.4 LABEL 14.3 30.4 15.1 JW GOLD BALLANTINES 14.1 LABEL 8.4 9.5 9.8 6.9 2010 2011 2012 2010 2011
Slide 138: The backbone of Pernod Ricard strategy in Russia
Scotch Whisky Potential in Russia The backbone of Pernod Ricard strategy in Russia 100% 2% 8% 12% 12% 80% 14% Leading positions in super dynamic categories 33% 24% Whisky U. Premium CR 18: Leader of UP Scotch Blended 60% 39% CR 12: Leader of SP Whisky S. Premium 41% 40% Whisky Premium Ballantine’s:
Slide 139: Our ambition to establish further our leadership
Scotch Whisky Potential in Russia Our ambition to establish further our leadership On a market with a …we will leverage our unique …to further establish our tremendous potential… competitive advantages… leadership. Most attractive Scotch Whisky Reinforcing our leading positions in portfolio cove
Slide 140: The Global Opportunity for Scotch Whisky
Christian Porta, CEO Chivas Brothers The Global Opportunity for Scotch Whisky
Slide 141: Agenda
Agenda ❶ Scotch growth is under-pinned by strong economic and consumer trend foundations ❷ Scotch performance has proved relatively resilient in economic downturns ❸ Pernod Ricard’s Scotch offer (Chivas Brothers) enhanced by a number of structural advantages 140
Slide 142: Scotch growth underpinned by strong economic and consumer trends
Scotch growth is under-pinned by strong economic and consumer trend foundations Category aligned to economic growth in developing markets and stable in developed markets Vast source of volume as consumers trade up from traditional local spirits Extensive range offer creating value at entry lev
Slide 143: Aligned to economic growth in developing markets
Aligned to economic growth in developing markets and stable in developed markets Brazil India* France • Source: IWSR 2010 and IHS Global Insight 2012. *India only, IWSR 2011 142
Slide 144: Surge in Middle Class and High Income households
Surge in Middle Class and High Income households between 2012 and 2022 Upper Middle Class Households (millions) CAGR 10% Affluent Class Households (millions) 90 180 CAGR 16% 2012 - 2022 ($40-$80K+ PPP) 82 2012 - 2022 (>$80K+ PPP) 155 80 160 140 70 120 60 100 50 80 40 32 60 CAGR 8% CAGR 2% 30 CAGR 10
Slide 145: Scotch volume share still low in many markets
Scotch volume share still low in many markets – providing sizeable source of volume for future growth Importance of Scotch and Imported Spirit penetration in key developing markets 90% 83% 79% 80% 70% % of Market volume 60% 50% 45% 42% 41% 40% 32% 30% 20% 20% 4% 7% 10% 2% 0.8% 0.3% 0% Brazil Mexico
Slide 146: Imported Spirits and Scotch gain as trade-up gap narrows
Imported Spirits and Scotch gain as the trade up gap between local spirit and imported Spirit is narrowed Price Movement of Value Vodka in Russia + 9% CAGR • Government policy to deal with excessive consumption of value vodka and increase tax revenue through minimum pricing. Source: (1) IWSR 2010. V
Slide 147: Scotch offers span the income distribution
Scotch offers span the income distribution, driving value in recruitment to category and trading up through price spectrum 20 Brazilian Households by Income Bracket 18 16 Millions of Households 14 12 10 8 6 4 2 0 <$10K $10 to 20K $20 to 40K $40 to 60K $60 to 80K $80 to 100K $100 to 150K $150K and ov
Slide 148: Scotch delivers aspirational lifestyle associations
Scotch delivers associations of aspirational lifestyle as well as modernity and dynamism Source: GFK U&A in China 2011. 147
Slide 149: Scotch drunk on a broad base of drinking occasions
Scotch is increasingly drunk on a broad base of drinking occasions (example: Vietnam) Restaurants 61% Hotel/ Lounge Bar 58% At Home 40% Clubs/ Karaoke Bar 36% Source: ACORN Usage and Attitude Survey, Vietnam 2011 148
Slide 150: Urbanisation brings more people into contact with modern on trade
Urbanisation brings more people into contact with modern on trade and aspirational lifestyles Percentage of World Population Living in Urban Areas Population Growth in Key Cities 2000 to 2015 80 70 % of World Population Living in an 70 Delhi +8m Mexico City +2.3m 60 60 51 50 43 Urban Area 36 40 29 3
Slide 151: Agenda
Agenda ❶ Scotch growth is under-pinned by strong economic and consumer trend foundations ❷ Scotch performance has proved relatively resilient in economic downturns ❸ Pernod Ricard’s Scotch offer (Chivas Brothers) enhanced by a number of structural advantages 150
Slide 152: Scotch market provides stability in volatile conditions
Scotch market provides some stability in volatile market conditions and recovers quickly from downturns Scotch volume versus FTSE 1990 to 2010 Premium and Super Premium+ Scotch 1985 to 2010 Global 400 1st Gulf War Asian crisis Financial Crisis Scotch volume Index on 1985 350 344 300 250 200 150 177
Slide 153: Market volumes in 2010 rebounded above pre-crisis
Market volumes in 2010 have rebounded to a stronger position than pre-crisis 250% 210% 200% 187% 2010 Volume as % of 2007 181% 157% 156% 150% 124% 108% 98% 100% 50% 0% India Poland Russia Vietnam Mexico Brazil France China Source: IWSR 2010.* India and China, IWSR 2011. 152
Slide 154: Agenda
Agenda ❶ Scotch growth is under-pinned by strong economic and consumer trend foundations ❷ Scotch performance has proved relatively resilient in economic downturns ❸ Pernod Ricard’s Scotch offer (Chivas Brothers) enhanced by a number of structural advantages 153
Slide 155: Age a key decision factor for consumers
Age a key decision factor for consumers. In Ultra Premium Scotch & above CBL sells the vast majority of 21 YO+ whisky. Age is the 3rd most important factor Chivas Brothers Share of Whisky Volume Sales 21 when choosing a whisky (2) years+ (1) 1st Brand Name 2nd Taste 3rd Age 1) IWSR 2010, PR Market V
Slide 156: In the fastest growing price segment, CBL has leading share
In the fastest growing price segment, CBL has leading share Volume Growth Rate of Ultra Premium + Chivas Brothers’ Share of Ultra Premium + Prestige versus Total Scotch 2000 to 2010 Prestige Scotch 12% 46% 42% Chivas Brothers # 2 Competitor Others Competitors Source: IWSR 2010, PR Market View 155
Slide 157: 16 different brand lines with significant volumes
CBL has a wide portfolio offer in Ultra Premium/Prestige EXTENSIVE ULTRA PREMIUM/PRESTIGE PORTFOLIO 4 Parent Brands 16 different brand lines with significant volumes* Chivas Regal Ballantine’s Royal Salute The Glenlivet * >4,000 9LC based on Pernod Ricard Depletions MAT to March 2012 156
Slide 158: CBL has the most successful Ultra Premium/Prestige brand
CBL has the most successful Ultra Premium/Prestige brand in the market Source: IWSR 2010, PR Market View 157
Slide 159: Chivas Brothers
| s% Chivas Brothers Pernod Ricard \ ae CLAN ‘tit a in ) - Capital Market Day Scotland 2012 159
Slide 160: Pernod Ricard - Vadim Grigorian
M% oa Pernod Ricard 29th - 30th May 2012 % Vadim Grigorian < 160
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161
Slide 162: Luxury is extremely seductive for Pernod Ricard
LUXURY IS EXTREMELY SEDUCTIVE FOR PERNOD RICARD FOR SEVERAL REASONS... 1. Size and growth potential of the luxury segment 2. Development of HNWI's 3. Possibility to address deep human insights 162
Slide 163: The huge potential of luxury
THE HUGE POTENTIAL OF LUXURY Luxury sales are projected to grow to €185bn ($252bn) in 2011. Up 8% from €172bn in 2010. ( forecasts by Bain&Co) Prestige Spirits are expected to grow at an annual rate of 7% in value between 2010 and 2016. Source: IWSR Forecast data restructured according to Pernod Ric
Slide 164: Million HNWIs worldwide
1 UNITED STATES SE 3.104.000 2 JAPAN ee 1.739.000 3 GERMANY ee 924.000 4 CHINA mu 535.000 5 UNITED KINGDOM mmm 454.000 6 FRANCE mum 396.000 7 CANADA mum 282.000 8 SWITZERLAND mum =243.000 9 AUSTRALIA mmm 193.000 IO ITALY mm 170.000 TLBRAZIL mmm 155.000 12 INDIA mg 153.000 TI MILLION HNWI’S WORLDWIDE
Slide 165: Pid
Pid ‘ad ( 4
Slide 166: In addition, there are bigger opportunities out there
IN ADDITION, THERE ARE BIGGER OPPORTUNITIES OUT THERE...
Slide 167: Emptiness
EMPTINESS RELIGION ; POLITICS SEPTEMBER Il sO STATUS GLOBAL WARMING A family, ESCALATING WARS : i ECONOMIC CRISIS FEELING OF INSECURITY OIL SPILL DUE TO THE FALL FLU EPIDEMICS OF TRADITIONAL INSTITUTIONS YOURSELF <I> <I>
Slide 168: An opportunity to create another category of luxury
THERE IS AN OPPORTUNITY TO a CREATE ANOTHER CATEGORY OF sce ‘CURRENT LUXURY’ "FOR MEN a
Slide 169: Luxury brands are the best to create desire
LUXURY BRANDS ARE THE BEST TO CREATE _ DESIRE ano LUXURY KNOW-HOW CAN, TO A CERTAIN EXTENT, BE APPLIED TO ALL PRBRANDS
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170
Slide 171: Pernod Ricard has the potential to create a new luxury category
PERNOD RICARD HAS THE POTENTIAL AND CAPACITY TO CREATE A NEW LUXURY CATEGORY The barriers to luxury inherent in alcohol are not real barriers PERNOD RICARD CAN LEVERAGE... iP Unique portfolio of prestige brands 2. Know-how and advancement on luxury matters 3. Cost-efficiency of luxury PULL model vs
Slide 172: The Pernod Ricard House of Brands
THE PERNOD RICARD HOUSE OF BRANDS: PORTFOLIO SEGMENTATION & PRIORITIES Global Icons (2) Priority Premium Priority Prestige Priority Premium Spirit Brands (7) Spirit & Champagne Brands (5) ff ~Wine Brands (4) Codecive: BEEFETER QUEEN m 6% -
Slide 173: Prestige brands have unique capital of stories and myths
OUR PRESTIGE BRANDS HAVE UNIQUE CAPITAL OF STORIES AND MYTHS
Slide 174: Prestige brands have products of exquisite craftsmanship
OUR PRESTIGE BRANDS HAVE THE PRODUCTS OF EXQUISITE CRAFTSMANSHIP AND RARITY
Slide 175: Share in prestige brands
SHARE IN PRESTIGE BRANDS MARKET SHARE 100% =1539 KCS 40,8% 22.7% 0.9% 0.2 % 0.2% 14 3 3 ee Pernod LMVH Diageo Remy Beam Camus Bacardi- Edrington Delamain WmGrants Ricard Cointreau Global Martini Group SOURCE: The Pernod Ricard Market View, based on IWSR data ending 2010, ‘000 9L cs - International W
Slide 176: Wholly-owned distribution network in growing luxury markets
PERNOD RICARD HAS A WHOLLY-OWNED DISTRIBUTION NETWORK THAT OFFERS STRONG PRESENCE IN ALL GROWING LUXURY MARKETS SUCH AS CHINA, RUSSIA, BRAZIL AND INDIA PERNOD RICARD LEADS THE WAY IN THE NEW ECONOMIES
Slide 177: Sales and profit per category
SALES AND PROFIT PER CATEGORY 100% —— 75% 1 so% 25% Standard & Value Premium Super Premium + Vol FY Tl Share Net Sales FY 11 Share CM FY 11 Share SOURCE: Prisma Actual 177
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178
Slide 179: Pernod Ricard's definition of luxury
PERNOD RICARD’S DEFINITION OF LUXURY: LUXURY IS ELEVATION Luxury goods are those whose consumption or possession leads to the feeling of ELEVATION in terms of - Social status - Cultural superiority 2 Pleasure 179
Slide 180: Luxury is not a premium plus
LUXURY IS NOT A PREMIUM PLUS - A luxury brand is not simply about expensive products - Luxury requires not a change in degree, but a change in nature 180
Slide 181: For implementing Pernod Ricard's luxury strategy
FOR IMPLEMENTING PERNOD RICARD’S LUXURY STRATEGY 1. Brand Behaviour 2. Route-to-Consumer 181
Slide 182: Luxury vs premium: conditions to become a true luxury brand
LUXURY VS PREMIUM: CONDITIONS TO BECOME A TRUE LUXURY BRAND NECESSARY CONDITIONS - Story and Myth capital - Product Capital SUFFICIENT CONDITIONS - A holistic code of Brand Behaviour
Slide 183: Sufficient and necessary conditions
Sufficient Conditions: Perfection in behaviour Territory of Desire Necessary Conditions: Legitimacy in nobleness
Slide 184: The B's of a luxury universe
THE 7 B’S OF A LUXURY UNIVERSE BEYOND BRAND VALUES... A BELIEF A CATEGORY... A WAY OF LI BEYOND POINT OF SALE... BEYOND A ATEMPLE — \ j ~CONSUMER TARGET... . i A PARISH BEYOND A PRODUCT... SERVICES AND EXPERIENCES “BEYOND A LOGO... A SET OF VISUAL ICONS 184
Slide 185: Perrier-Jouet heritage Art Nouveau values
PERRIER-JOUET HERITAGE ART NOUVEAU VALUES ‘Ate a FASCINATION OF MOVEMENT 0 Wo ORGANIC POETIC ONEIRISM 59 1B: A BELIEF PERRIER-JOUET AND ART NOUVEAU 185 EMILE GALLE BOTTLE
Slide 186: Myth-telling: Martell Cordon Bleu centenary
Bternal Sak since ig” : hy ae EI iw Ue 2B: MYTH-TELLING MARTELL CORDON BLEU CENTENARY 186
Slide 187: A parish: Royal Salute and Polo tribe
I 3B: A PARISH ROYAL SALUTE AND POLO TRIBE 187
Slide 188: A set of visual icons
4B: A SET OF VISUAL ICONS PERRIER-JOUET ANEMONES 188
Slide 189: Services and experiences
5B: SERVICES AND EXPERIENCES MAISON CORDON ROUGE IN SPAIN 189
Slide 190: A temple
6B: A TEMPLE MARTELL AT HONG KONG AND KUALA LUMPUR AIRPORTS 190
Slide 191: Martell and Pinel & Pinel; G.H.Mumm and Patrick Jouin
MARTELL AND PINEL & PINEL G.H.MUMM AND PATRICK JOUIN 7B: A WAY OF LIFE CO-CREATION OBJECTS 191
Slide 192: From route-to-market to a route-to-consumer approach
FROM ROUTE-TO-MARKET TO A ROUTE-TO-CONSUMER APPROACH OBJECTIVE Build luxury brands at Pernod Ricard by developing 1:1 relationships with High Net Worth Individuals (H NWI's) and following through with sales.
Slide 193: Absolut Elyx store in Sao Paolo
ABSOLUT ELYX STORE IN SAO PAOLO ESTABLISHING DIRECT SALES TO CONSUMERS 193
Slide 194: Elite Club and Hainan Rendez-vous partnership in China
APRIL stH-81 TERETE SRA) > ZARTELL GNAC ELITE CLUB AND HAINAN RENDEZ-VOUS PARTNERSHIP IN CHINA DEVELOPING 1:1 RELATIONSHIP WITH HNWI’S 194
Slide 195: Partnership with Art Basel and Design Basel
PARTNERSHIP WITH ART BASEL AND DESIGN BASEL DEVELOPING 1:1 RELATIONSHIP WITH HNWI’S 195
Slide 196: And finally...
AND FINALLY... LUXURY.IS A MATTER. OF CULTURE AND — COMPANY MENTALITY ~__