China Now Pernod Ricard’s Second Largest Market Worldwide
Though demand for fine wine, whisky, vodka and even craft beer continues to climb among China’s expanding middle class, cognac remains the preferred tipple for many of the country’s wealthier, typically older and male, drinkers. Following their counterparts in Hong Kong, whose thirst for cognac in the 1970s and ’80s became the stuff of legends, in recent decades China’s economic boom created a new breed of mainland Chinese cognac aficionado, a demographic that has become indispensable for major producers like Remy Cointreau and Pernod Ricard-owned Martell. As of this summer, the Asia-Pacific region accounted for 62 percent of Remy Cointreau’s cognac sales, with China in particular responding well to intensive marketing efforts by the group for its US$2,500 Louis XIII cognac.
Also looking to grab a larger piece of the pie in China — 2.3 million cases of cognac were sold in the country last year, a 22 percent increase over 2010 — Martell has split its marketing efforts almost evenly between the luxury side and the cultural side of China’s urban scene. Last year the company held themed Martell parties across the country, following other efforts like its partnership with Beijing’s Central Academy of Fine Arts in 2007 to create the Martell Art Foundation. Continuing the ramp up its marketing efforts in 2012 despite overall slower growth in the country’s luxury sector, Martell has held celebrations in Hong Kong celebrating the 100th anniversary of the Martell Cordon Bleu and launched a limited edition “Cordon Bleu Centenary Exclusive.”
Though cognac remains a reliably lucrative spirits segment, Pernod Ricard’s other brands — particularly those in the whisky category — continue to catch on among more of China’s drinkers as well. Over the past year, consumption across all segments in China contributed heavily to the company’s strong revenues, which rose 8 percent globally to US$10.75 billion — Pernod Ricard’s best returns since the outbreak of the 2008 financial crisis. Among its top 14 brands, growth hit 10 percent, despite an overall stagnant global market. In an attempt to top these figures in 2013, Pernod Ricard has branched out in recent months to promote strategic brands via cultural initiatives — again, something we’ve seen from other wine and spirits giants like Diageo-owned Johnnie Walker and LVMH-owned Moët & Chandon.
As the leading Scotch whisky brand in China, [Pernod Ricard-owned] premium Scotch whisky Chivas Regal launched the Chivas Collective Inspirational Space in June 2012 in Shanghai.
The pioneering spirit of the premium brand Chivas Regal was integrated into the Inspirational Space, which perfectly exhibited Chivas Regal’s brand identity as a leader in trends, culture and lifestyle.
Following the opening ceremony was the premiere of the Chivas Regal 25 Year short film Dejavu, a tribute to the Chivas Collective by legendary Chinese director Wong Kar-Wai, which received a great deal of attention at the 65th annual Cannes Film Festival.
Co-starring Golden Horse Awards winner Chang Chen and Chinese supermodel Du Juan, the film, with its fascinating plot and aesthetic cinematography, interprets the Chivas Regal 25 Year brand spirit of “A Legend Reborn”.
Super-premium Scotch whisky brand Royal Salute has continuously sponsored various polo cups around the world, including polo tournaments in the United Kingdom, the United States, China, India, Dubai and Brazil.
In China, Royal Salute sponsored the country’s first international polo tournament, the Royal Salute Gold Cup 2011 China Open Polo Tournament, which was held in 2011, and Royal Salute will host it again in 2012.
Though spirits giants like LVMH, Diageo and Pernod Ricard will likely step up their efforts to promote wine, whisky and vodka to China’s younger generation of drinkers, cognac will remain their bread and butter and — considering its popularity as a gift and drink among China’s well-heeled — will likely stay that way for years to come. Even in Japan, which saw demand peak in the late 1980s, continued demand among older drinkers has kept imports strong for decades. According to Vinexpo, China should be consuming around 3.3 million cases of the spirit by 2015, a figure that dwarfs the 2.3 million cases consumed in Japan at the height of its cognac fever in 1989-1990.