We're drinking more spirits than any other booze

Which might be why Pernod Ricard is selling its wine portfolio

7/19/24 11:09AM

Pernod Ricard, one of the biggest global wine and spirits sellers, is decanting the majority of its immense wine portfolio to Australian Wine Holdco, the French company announced Wednesday, doubling down on its growing spirits business.

The news follows years of stalling vino demand at Pernod — with wine accounting for just 4% of the brand’s ~$13B worth of sales in fiscal year 2023 — as China’s once-booming wine market dwindles and Western tastes shift towards harder stuff.

Indeed, an April report from the NIAAA found that American alcohol consumers are increasingly opting for liquor over lower ABV offerings. In 2022, the average person in the US aged 14+ years got through the equivalent of 1.06 gallons worth of pure alcohol in spirits beverages. That’s up 25% from 2017-2022, while beer and wine consumption fell by 4% and 2% over the same period, respectively.

Spinning bottles

Pernod’s deal will see the transfer of popular international wine brands like Campo Viejo and Jacob’s Creek, as well as several associated vineyards, at a time when wine consumption is drying up. Australia, the world’s fifth largest wine exporter, is feeling the effects: in March, millions of the country’s vines were deliberately destroyed in a bid to temper overproduction, which has seen the price of grapes more than half since 2020 in regions around the country.

Fortunately for Pernod, though, the drinks giant still has a winning cocktail of liquor brands under its belt, including Absolut vodka, Jameson whiskey, and Havana Club rum — with those 3 labels alone selling nearly 28 million 9-liter cases between them last year.

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