CHIVAS PULLS AHEAD IN 2022
Chivas Brothers, the Scotch Whisky arm of French Alco-Bev major Pernod Ricard announced its FY23 full-year performance with net sales up +17 per cent, taking total sales to a ten-year high. The results demonstrate ongoing strong global demand for Scotch and reinforce the company's long-term premiumisation strategy.
Alongside this positive growth, Chivas Brothers also announced more than £60 million in planned investment over the next three years to accelerate its energy and carbon reduction journeys to achieve carbon neutral distillation by the end of 2026. It follows the company's move to make its heat recovery technology learnings open source for the industry, after proving successful at Glentauchers distillery, with a 53 per cent reduction in carbon emissions at this site alone.
Chivas Regal celebrated global growth of +25 per cent with impressive performance in markets such as India and Japan. The brand's success was driven by its core aged range, with Chivas Regal 18 the leading 18-year old blended Scotch globally by both volume and value in calendar year 2022, according to IWSR Drinks Market Analysis 2022. Chivas Regal was also the leading contributor to Pernod Ricard Group growth in FY23.
The Asia region has been particularly robust, with +21 per cent growth in FY23, and the number one contributor to growth overall. India (+27 per cent), South Korea (+19 per cent), Japan (+28 per cent) and Greater China (+7 per cent) have also seen exceptionally strong performances and are driving demand with new Scotch audiences. China is a vast market for Johnnie Walker.
Chivas Brothers plans to introduce premium and super-premium brands from its global portfolio in India, riding on the premiumisation trend in the region. India with its growing whisky consumer base can potentially be the largest market for the global inc.
India is the biggest whisky market in the world with over 25 million new consumers entering the space every year, and can well be a ‘unique and game-changing’ market. The company has witnessed a 13-15 per cent constant CAGR over the last five years. In FY23, it reported 27 per cent growth in India.
The makers of Chivas Regal, Ballantine’s, and Royal Salute will be introducing new variants and matured malts of its Glenlivet brand, which is fruitier, smoother and tropical flavor-laden and and has the type of aromas dedicated to the southern part of India. It will also be launching a new expression of 100 Pipers in India, in the premium segment.
In total, Chivas Brothers has 40 odd Scotch Whisky brands, and only 7-8 are currently present in India, hence there is room for growth in the Indian market, both mid-range and premium. The innovations of Glenlivet, popular in both the EU and the USA, will now reach Indian shelves.
Today, India is one of Chivas Brothers top three markets and at par with France. The CAGR rate is sustainable, driven by growth in the premium and super premium category. Chivas is also building brands, supply chain, and inventory in the region. The company is seeing growth to be more value-driven than volume-driven as consumption has ramped up with premiumisation taking centre stage. Both Ballantine’s and Chivas saw a very strong growth. The higher the age profile of the whisky or the premium-ness (to coin a word) the stronger the growth has been. On the India-UK FTA negotiations, Chivas believes that though the company does not define its strategies according to the FTA, it will be an ‘excellent’ addition as it can help to offer much better Scotch Whisky at more affordable prices to consumers in India and will be a “huge benefit.”
Ballantine's grew by +13 per cent in FY23, driven by particularly strong growth in its prestige range, which exceeded that of the total Prestige and Prestige Plus Scotch category, according to IWSR in 2022. Ballantine's 21 and Ballantine's 17 have been the key drivers alongside Ballantine's Finest, with the Asia region excelling during this fiscal.
Royal Salute recorded a significant +32 per cent, growing ahead of the Prestige and Prestige Plus Scotch category by both value and volume in 2022-23, as the brand continues to elevate through exclusive luxury releases such as the Royal Salute Coronation of King Charles III Edition.
The Glenlivet continues its upward trajectory with +9 per cent growth and was the best-selling single malt by volume in 2022, according to the IWSR4, setting the brand in strong stead for its 200 year anniversary in 2024. This has been driven by significant demand for its Super Premium and Ultra Premium ranges in an already competitive category, with balanced growth across the brand's global footprint.
Specialty brand Aberlour, part of the broader Chivas Brothers single malt brand portfolio, also grew +11 per cent in the highly competitive malts category.