US – Pernod Ricard has plans to significantly increase its stake in Sovereign Brands, which it hopes will strengthen the two company’s long-term partnership and will enhance its exposure to the US market.
At the closing of the transaction between the two firms, expected to take place in November 2022, Pernod Ricard will ‘fully consolidate’ Sovereign Brands in its financial statements.
The investment, which is the largest investment made since the acquisition of Absolut and the first in a portfolio of Pernod Ricard, is said to be the beginning of a long-term partnership aimed at creating business opportunities between the two companies.
Pernod Ricard will proceed in successive stages with the idea of ultimately taking control of Sovereign Brands if the results satisfy it.
Founded in 1999 by brothers Brett and Brian Berish, Sovereign Brands owns a selection of wine and spirits brands that also includes Villon Cognac.
Its biggest success, however, has been Luc Belaire – a wine brand built on the importance of celebrity marketing.
The brand’s range of sparkling wines is commonly seen across the social media accounts of US musicians Rick Ross, Drake, and DJ Khaled. It is one of the top-selling French sparkling wines in the US.
Data from the company show that 1m nine-liter cases of French sparkling wine Luc Belaire were sold in 2021 and a range of Caribbean rums sold under the Bumbu brand were 300,000 nine-liter cases.
Alexandre Ricard, chairman, and CEO of Pernod Ricard said: “Our partnership with Sovereign Brands has already proven to be very successful, with brands such as Bumbu and Luc Belaire now reaching an ever-growing number of consumers in the US and abroad.”
I believe we are perfectly matched as two consumer-centric companies with a shared commitment to creativity, innovation, and brand building.”
The two companies are also planning to launch an unnamed brand from a joint incubation project in the coming months.
Pernod Ricard recently revealed it has a 4.2% share of the ready-to-drink (RTD) market in the UK, with “plenty of headroom to grow”, according to the company’s commercial director.
In the company’s fiscal 2022 results released on 1 September, the firm recorded ‘very strong’ double-digit growth for its RTD portfolio, with rapid development in the US.
Pernod Ricard has released several RTD line extensions for its core spirits in recent years, including Malibu canned cocktails, Jameson Ginger & Lime, and a trio of Beefeater Gin and Tonics.
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