Pernod Ricard Backs American Whiskey to Deliver Global Growth

Pernod Ricard announced last week the launch of The American Whiskey Collective, a new business unit dedicated to the company’s American whiskey portfolio that will pursue growth by investing in the “new fashioned” brands’ innovation, according to the division’s newly appointed head, Craig Johnson.

“When you look at American whiskey brands, one of the tried and true formulas [for growth] is through innovation,” said Johnson.

While the French company owns powerhouse Irish and Scotch whiskeys like Jameson and Ballentine’s, Pernod Ricard’s state-side focus is on premium, non-traditional challenger brands. Rabbit Hole, acquired in 2019, is known for distinct grain mixes and limited edition releases. Lesser known spirits like Smooth Ambler and TX Whiskeys joined the portfolio in 2016 and 2019, respectively. And since its acquisition of Jefferson’s Bourbon three years ago, growth of the brand has more than doubled, according to Johnson. Part of that success can be attributed to Jefferson’s forward-thinking founder, Trey Zoeller, whose experiments in aging include Jefferson’s Ocean Aged at Sea Rye.

“Our brands are kind of non-traditional American whiskeys and we’re really proud of that,” he said. “The consumers of American whiskeys look to get unique products, whether it’s unique recipes like Rabbit Hole has or unique aging like Jefferson’s Ocean.”

American whiskey sales are expected to account for a significant amount of Pernod Ricard USA’s total volumes within the next five to 10 years. The category has been enjoying a resurgence recently —and different processes, flavors and aging techniques are part of the increased interest, according to Drizly BevAlc Insights. American whiskey volume has been accelerating over the last decade, growing from 16 million nine-liter cases in 2011 to 29.7 million in 2021, according to the Distilled Spirits Council of the U.S.

An interest in local products could also be giving distillers a boost, especially as whiskey production has expanded out from traditional regions. Smooth Ambler is distilled in West Virginia and TX is made near Fort Worth, Texas.

“There is that macro trend of people wanting local products. They want products from the U.S., but they also want craft and high quality products,” said Johnson.

The collective will build on the models of two similar divisions, the Gin Hub and House of Tequila, that boost smaller brands with operations and marketing support.

“The focus and the attention that these new business units can bring to categories can be a real driver of the business and a real strength,” he said.

Expect to see new offerings similar to Rabbit Hole’s limited edition releases and a TX-branded ready-to-drink product that recently launched in Texas. Advertising support will also be a priority: Johnson and the team are considering nontraditional media approaches that have been effective in previous campaigns, such as its 13-minute documentary on Jefferson’s founder. Expect some celebrity presence too— TX recently teamed up with actor Scott McNairy for a series of spots aimed at millennial drinkers and highlighting its roots as a uniquely Texas brand.

Establishing a consolidated global footprint is also a priority, starting with Western Europe and Asia. American whiskey exports have enjoyed growth as of late, with annual sales now exceeding 20 million cases. Pernod Ricard itself saw global sales surge by double digits in the first half of fiscal year 2022, with organic growth up 17%, thanks to the strength of the U.S. dollar and the Chinese yuan, according to the company’s latest earnings report.

With the opportunity clear, the French spirits conglomerate will support The American Whiskey Collective with the “infrastructure, marketing investment levels and innovation support” that match its “ambitious performance goals.” That will be the task ahead for division leaders Johnson, a member of Pernod Ricard USA’s executive team and an 18-year company veteran, and Jessica Chen, vice president of operations for American whiskies.

“We feel that we can start with global growth because we’re in a place that from an operations standpoint we can help fund global growth behind these brands now, and we’re in a place from a supply chain standpoint that we can deliver,” said Johnson.