Pernod Ricard Winemakers toasts 27 years of success in Australia

September 2017

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Australia’s range of wine regions and varieties, experience in innovative winemaking, welcoming business environment and strong base for exports to key markets were key drawcards for French winemaker Pernod Ricard.

Pernod Ricard Winemakers is one of Australia’s largest winemaking companies. It is home to some of the world’s and Australia’s best-known wine brands including Jacob’s Creek, George Wyndham and St Hugo.

Since entering Australia in 1989, Pernod Ricard has helped expand the local wine industry and promote Australian wines to global markets. It acquired Orlando Wyndham and set about repositioning its brands.

Global context

Pernod Ricard has approximately 18,500 employees globally, including 101 production sites in 24 countries. In 2016, the company achieved annual sales of over €9 billion. Despite Pernod Ricard’s global presence, its Australian operations remain at the centre of the company’s commercial wine strategy, with approximately 800 employees across the country.

Brett McKinnon, Global Operations Director, Pernod Ricard Winemakers, says the company chose Australia because it was keen to build on the local industry’s innovative approach and natural advantages.

Australia has an incredible availability of space to expand and develop the wine industry, maintaining quality while responding to increased demand.

‘In the 1980s, Australia was leading a significant change in the global wine industry,’ he says. ‘Instead of taking on old-world, traditional ideas of what wine should be, Australia’s wine industry was the first to take a consumer-friendly approach that made wine more accessible, understandable and affordable for everyday consumers.

‘Quality product, great brands and a stable business environment made Australia an attractive investment location for Pernod Ricard.’

Building on Australian innovation

Australia’s wine industry has a long history of investment in research and development (R&D) and innovation, which McKinnon says is led by the Australian Wine Research Institute (AWRI).

Founded in 1955 in Adelaide, South Australia, AWRI works with local and national industry stakeholders such as Pernod Ricard Winemakers to minimise the environmental impact of its production facilities.

These initiatives include the use of grape pomace, a by-product of crushing grapes for winemaking, to reduce methane production by incorporating it into livestock feed; and developing a bio-gas generation feasibility study for industry to reduce waste, energy use and carbon dioxide emissions.

Investment in R&D is also helping Pernod Ricard Winemakers to evolve and enhance its products. Innovation drives new product development such as Jacob’s Creek Double Barrel – finishing reds in whisky barrels – or research on how to improve production techniques and environmental sustainability.

Collaboration with growers is central to ensuring a guaranteed supply of high-quality grapes, and Pernod Ricard Winemakers shares up-to-date information on vine management, pest control and technical advice with growing communities on a regular basis.

International success

Jacob’s Creek is Pernod Ricard Winemakers’ most successful brand in terms of global sales – it is India’s leading imported wine. In Canada, Jacob’s Creek Double Barrel and Moscato products are incredibly popular and are driving continued growth in North American markets. Meanwhile, Poland is currently one of Jacob’s Creek’s strongest-growing markets outside of Asia.

Close proximity to growing Asian markets has seen Pernod Ricard Winemakers’ three Australian brands – Jacob’s Creek, George Wyndham and St Hugo – gain popularity throughout Asia via the company’s strong distribution networks.

‘If you talk about where Pernod Ricard Winemakers does have a significant competitive advantage, it’s definitely in Asia,’ says McKinnon. ‘We expect this advantage to continue to grow, particularly in China where imported wine consumption is growing very quickly. Australia is very much at the forefront of this development, and Jacob’s Creek is one of the leading brands in China.’

Stimulating Australia's tourism industry

A complementary strategy for Pernod Ricard Winemakers has been to stimulate Australia’s tourism industry by bringing Chinese and other Asian tourists to South Australia’s Barossa Valley.

The A$5.5 million Jacob’s Creek Visitors Centre has attracted nearly 2.3 million visitors since its opening in 2002, and serves as Pernod Ricard’s centrepiece for domestic and international wine tourism in the Barossa Valley.

In 2016, Pernod Ricard Winemakers opened its A$5 million St Hugo experience, with bespoke tours, tastings and winemaking tutorials catering to the luxury wine market and driving a new stream of fine wine drinkers to the local region. The project was supported by an A$1 million South Australian Government regional development grant. The investment has created significant local employment, both directly and to the broader tourism and hospitality industry, while enhancing South Australia as a premium food and wine destination.

‘For almost 30 years, Pernod Ricard Winemakers has invested in Australia’s wine industry with great success,’ says McKinnon. ‘The key for us is to maintain R&D and innovation, and to continue marketing a range of products in different markets globally.

‘We have to adapt and move with the markets, and support each brand as best we can. That includes our investment in tourism, which has allowed us to diversify our business offering. That support will continue to bring significant investment into Australia.’

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