Pernod Ricard’s Chris Shead talks spirits
PREMIUM brands present retailers across the UK with a serious margin opportunity, according to spirits giant Pernod Ricard, and Scottish c-stores could be in for a particular lucrative time.
Following the implementation of minimum unit pricing, the gap between premium brands – which Pernod Ricard defines as 20% above the market average – and the value brands has tightened markedly on this side of the border.
Competing with the supermarkets, who can no longer slash prices below independents, is now a realistic proposition and Chris Shead, channel director for grocery at Pernod Ricard, told Scottish Grocer that he reckons retailers have a real chance to change perceptions of their store.
“It’s a chance to get reappraisal isn’t it, because effectively those persons who have historically gone to a grocery store to get the lowest price will no longer need to.
“What an opportunity, and the thing about convenience stores is they’ve got a one to one relationship with their shoppers so there’s an opportunity for them to have that personal contact and ask ‘what else would you like to see’?”
In reality what you’ve got is people who are on Instagram, they’re interested in the experience.
Minimum pricing has narrowed the gap between the cheapest spirits on the market and Pernod Ricard premium propositions like Absolut, Havana Club and The Glenlivet, and Shead said there are no plans to nudge the price point up for Scotland. “In a way, it should help the trade up to more premium brands,” he said.
That trade up to premium brands isn’t just about minimum pricing, however, it’s part of a much wider trend according to Shead who reckons social and technological changes are driving consumers away from value brand spirits.
“In reality what you’ve got is people who are on Instagram, they are interested in the experience, showing off and doing something interesting for their friends so that as a social trend means they’re not racing to the bottom to find the cheapest on display.”
Shead added that while premium is the way forward in his view, he appreciates retailers must take a horses for courses approach and offered some suggestions on how to approach spirits ranging in store.
The channel director suggested that low footfall community stores in less affluent areas will know themselves that going huge on premium spirits may not be the most worthwhile move, but for those in higher footfall areas it’s worth stepping things up.
Whatever kind of store however, Shead reckons there’s scope for cutting down at the value end of the market and introducing some more choice closer to the top.
“From a ranging perspective, you don’t necessarily need Famous Grouse, Bells, Teachers, Grants and Whyte & Mackay at the bottom end to just have one bottle of Chivas on your shelf at the upper end.
“What we’re really saying is you need to kind of go with the trends in the marketplace, you probably need to reduce range at the bottom and expand at the top. And by doing that you’ll be featuring more brands with heritage and provenance in the category.”