This is a big opportunity and I have a number of personal and business goals which I’m excited to get stuck into.” These are the words of Julia Massies, one of the UK’s most influential trade figures, as she sips on a Martini surrounded by the luxury interior of London’s Scarfes Bar. Last summer Massies was unveiled as the new managing director of Pernod Ricard UK, the distribution subsidiary of one of the world’s biggest spirits companies in one of the world’s most developed markets. The company is responsible for the distribution and marketing of Pernod’s portfolio across the UK and is also home of The Gin Hub – the gin subsidiary which was formed in 2017.
Having joined the company in 2001, Massies held a range of financial roles over the subsequent 22 years at Pernod Ricard before landing the UK’s top job.
“My previous roles in the company have always been in finance and actually across quite a broad spectrum, so it felt natural to move on to a general management role at some point, and so far I’m loving it. There are lots of new things to learn but knowing the business as well as I do certainly helps.”
The fair share
According to Statista, the UK Spirits market is projected to generate a revenue of US$8.7bn in 2024 and next year its volumes are forecast to grow 1.6%. In a global context these volumes aren’t as significant as the likes of the US or China, but in terms of value the UK remains a leader in premium markets.
“For the strategic plans of each sub-sector of Pernod Ricard we have medium-term plans – three years out – and then we keep an eye on the short term to check the trajectory is right.
“The main focus for Pernod Ricard UK is continuing to build our shares,” continues Massies. “About 10 years ago we sat at 4% market share and we’ve since doubled that to around 8% with a blend of 7% in the off-trade and close to 15% in the on-trade. Eight per cent is still relatively modest considering that Pernod Ricard on a global level has 16-17% market share on average. We’re nowhere near our fair share at the moment, so we’re continuing to invest in our brands to not just bridge the gap, but hopefully go beyond the global average for the company, although this will take time.”
The spirits portfolio of Pernod Ricard contains some of the world’s biggest premium brands across many categories, including Jameson, Beefeater, Chivas Regal and Havana Club.
“We have priority brands and these change over time. Right now the top priorities are Jameson, Absolut, Malibu and Kahlúa. Of course, all our brands are important but we have to target them well – we’re matching each brand with a different moment. Consumers today are repertoire drinkers, they want drinks for all occasions and our portfolio is positioned to meet this demand. Absolut was around 200,000 cases in the UK in 2008 when we brought it in and now it’s almost hit the one million case threshold.
“The top end of the on-trade remains a key focus because when you sell brands in five-star hotel bars such as here in Scarfes Bar, it percolates into the off-trade. Aside from the growth in market share, a big thing for me is employee engagement. I want Pernod Ricard UK to continue to be a good place to work and continue the company’s winning trajectory.”
Market appraisal
While holding a position of power and influence over the UK trade, Massies’ role doesn’t come without its challenges. The initial impacts of Brexit have largely stabilised in the spirits sector, but inflation off the back of the pandemic and a 10% duty increase on spirits have made life tricky.
“The spirits market in the UK is challenged right now. Inflation combined with the historic duty increase during the most recent Budget announcement in August has made pricing a real challenge,” says Massies. “Generally speaking the past two years have have been challenging for this sector. Certainly we would welcome a freeze on duty. The hospitality sector has been vocal about this and the duty take for the government in September was its lowest since 2009, so it’s clearly put people off.
“Given the spirits market is now in its second consecutive difficult year, I think a pause on duty would give consumers a break. I think we’re in an environment now where we will see inflation start to ease. That being said, it’ll be a while before consumers see this reflected in prices.
“Fundamentally I think the UK market will grow in the medium to long term as well as continue to premiumise. London particularly remains a trendsetter across the board. I don’t have the figures for Christmas just yet, but anecdotally I’m expecting to see good on-trade results for this period and we’re looking to gain significant market share in the on-trade.”
At Pernod Ricard’s annual Christmas gathering, the trade press was introduced to its latest wine brand, Greasy Fingers, to sit alongside its existing distribution portfolio of Campo Viejo, Brancott Estate and Stoneleigh. The launch of Greasy Fingers Luscious Red 2022 and Big Buttery Chardonnay 2022 is a different approach to marketing in the UK wine sector, targeting greasy fast food pairings.
“Spirits remains our biggest category, but our wine business is performing well. Our brands across the range are all looking positive and I have high hopes for our latest label Greasy Fingers – I think it’s exactly the type of wine brand the UK needs right now.”
Having spent several hours with Massies, her calm and astute persona shone through – two invaluable attributes when it comes to navigating one of the world’s most mature and intricate drinks markets. To say she wants to double Pernod’s market share in the UK is an ambitious target, but with her financial background and an impressive line-up of brands, it’s certainly doable.
