2013 Article but theme is still prevalent:
Interesting points:
- Pernod ricard has achieved better growth and margin in the past. Ricard’s strategy of focusing on the higher price points and avoid competing at the bottom end of the market has paid off in India with its premium brands finding a lot of buyers. In FY 2019, gross sales of pernod grew by 27%, USL by 10%. Also pernod made a net profit of 1300 cr, almost double of USL’s profit (700 Cr).
- The focus and investment on premium brands is helping in better growth. Premiumization theme is being pursued by all both Pernod and USL, and Radico is trying to go in the same direction. Radico has pipeline of launches in whisky segment.
- With a diversified and established portfolio of brands and also having muscle power to investment behing brand, USL and Pernod have better chance of getting lion’s share of premiumization theme. Radico can also co-exist in some niches.
- As bigger players focus on premium end, pricing intensity in the sector might be subdued for sometime, which can help in increasing overall profitability in the sector.