Understanding Business Strategy of Pernod Ricard

In 1805, Henri-Louis Pernod founded the Maison Pernod Fils company in the town of Pontarlier, near France’s border with Switzerland. This company produced an absinthe-based beverage, which was very popular during its time. However, in 1915, absinthe was banned. A few years after that, Pernod merged with two other companies to form Les ‘tablissements Pernod (The Pernod Establishments) which manufactured liquors that used anis as a base. In 1938, the company launched the brand Pernod 45. in 1951, it started selling its first pastis, Pastis 51. In the very first year of its production, Pastis 51 sold almost two million bottles to cafes.
On the other hand, in 1932, Paul Ricard produced the first pastis, named after him, in 1932 in a place near Marseilles. Soon, Ricard’s company rose to take its place beside Pernod as one of the leaders in the French spirits industry.
After four decades of intense competition, Pernod and Ricard decided to come together. Between 1971 and 1974, the management of the two companies had prepared meticulously for the merger. Pernod Ricard was born in 1975, with a consolidated turnover of 2.5 billion francs.
Pernod-Ricard today is the world’s second-biggest company in the wine and spirits sector. It has occupied key positions in every continent. It is the number one wine and spirits company in Europe and in the Asia Pacific, and number two in the Americas. The group has fifteen key brands of international renown:
&gt.Ricard
&gt.Ballantine’s
&gt.Chivas Regal
&gt.Malibu
&gt.Stolichnaya
&gt.Havana Club
&gt.Beefeater
&gt.Kahlua
&gt.Jameson
&gt.The Glenlivet
&gt.Martell
&gt.Mumm
&gt.Perrier-Jouet
&gt.Jacob’s Creek
&gt.Montana
These premium brands play a central role in Pernod Ricard’s development, but "the Group’s success over the years owes as much to the talents of its employees, to its core values and to a decentralized structure unique to Pernod Ricard", according to the company’s website.
The map below shows the reach Pernod Ricard had in 2006.
Source: History of Pernod Ricard, www.pernod-ricard.com
At present, Pernod Ricard employs 19,000 people in more than 70 countries all over the world. Pernod Ricard has 113 production plants distributed worldwide.
The journey from 1975 to 2009
From the very beginning, Pernod Ricard’s main aim was the internationalization of its products. For achieving this, Pernod Ricard followed a clearly chalked-out, almost aggressive policy of acquisitions right from 1975 itself. The first acquisition made by Pernod Ricard was that of the Scottish Campbell Distilleries, which made Scotch whiskeys, in 1975-76. Next, in 1976, Pernod Ricard purchased Cusenier (Argentina), which made liquors from extracts of grains, fruits, and other parts of plants.
In 1979, Pernod Ricard made its first step outside France, in an effort to maintain its sales growth. In 1980, while Austin Nichols, the England-based maker of bourbons, was acquired, Pernod Ricard launched a massive marketing campaign amounting to nearly $50 million in England, Spain, and Germany. The campaign included gimmicks like giving away products at discos. The same year, Pernod Ricard also added Brut de Pomme, a low-calorie, apple-based soft drink, to its product line.