Sometime during the Covid-19 pandemic – not a great time for wining and dining, or travel and socialising – I had put my thoughts down on a corporate brand strategy for Pernod Ricard, the world’s No. 2 wines and spirits company. I wrote and shared this on my blog along with corporate campaigns for the company, as I was firmly of the view that Pernod Ricard has to find a way to compete better with the Goliath of the industry, Diageo. And that there was no better time to embark on a new, more invigorated and more purposeful brand strategy, than when people were emerging from the worst pandemic and were ready to travel and socialize again like before.
More than two years later, my thoughts turn to the whisky brands that Pernod Ricard has in India, many of which Seagram launched when they entered the Indian market in 1993-94, and I was privileged to work on and lead during my second stint at my old advertising agency Ogilvy. It appears that I returned to Ogilvy Delhi at just the right time to be able to work on the company and its brands from their inception in India.
Then, as now, it made sense to focus all one’s efforts on the whisky category, as it continues to be the single largest beverage group in the beverage alcohol industry in India, and is highly segmented with several brand offerings from many companies at different price points. Seagram took a decision to introduce their relatively unknown Scotch Whisky brands first, along with several IMFL (Indian made foreign liquor) whiskies, and almost all of these had Seagram in their brand names. We at Ogilvy Delhi recommended a corporate campaign to build the credentials of Seagram in India, since the company too was not known in India and especially not by its brands. I am happy to have worked on this, as it helped build the image of Seagram in India through its best-known international brands such as Chivas Regal, Royal Salute, Martell, and many others.
The management of the company and the brands changed hands over two decades ago, and these are now under the custodianship and supervision of Pernod Ricard which acquired a significant part of Seagram’s business and brands along with Diageo in 2000. Yet, the individual whisky brands as well as gin continue to carry the Seagram name, and I wondered how long this might continue. Is Seagram now a separate brand by itself within the Pernod Ricard whisky range, for which Pernod Ricard might have acquired the rights in perpetuity? Or, does Pernod Ricard have the license to use the Seagram brand name until a certain date, or on a renewable basis?
Since I don’t have the answers to these questions, and I couldn’t find any article dealing with this subject online, I thought I might start thinking about the Pernod Ricard – Seagram brand relationship and when and how Pernod Ricard might consider a life without Seagram if it ever came to it. And of course, I am thinking all this in the context of the new corporate brand strategy and ideas that I recommend for Pernod Ricard, and which you might want to read again to refresh your memory.
I approach this task in four sections. Together they examine the value of the Seagram association to Pernod Ricard, Pernod Ricard’s own ambitions and aspirations as a global No. 2 player in the industry, where the Seagram association helps or hinders the vision and mission of Pernod Ricard, and how to rebrand where necessary.
What Pernod Ricard must focus on as a corporate brand, going forward
From the corporate brand strategy that I had worked on two and a half years ago and shared on my blog, it is clear that Pernod Ricard must differentiate itself from its biggest competitor, Diageo. I have said that since Pernod Ricard can’t always compete on marketing investments and size of the brands – especially in whiskies where Diageo has chosen to concentrate and is many times larger – the better thing to invest in is in the quality of the product and the relationship with the consumer.
To this extent, I recommend that Pernod Ricard build its corporate brand (and individual product brands) by making better, more knowledgeable and appreciative consumers of wines and spirits around the world. In this, I have suggested they focus harder on key and important markets such as US, UK, Europe, China and India. As the world’s No 2 wines and spirits company, Pernod Ricard certainly has a wider repertoire of drinks and brands as well as the expertise to position itself as a company with savoir faire in fine living.
And as a company guided by its core value of encouraging and creating conviviality, Pernod Ricard is uniquely positioned to make better and more discerning consumers of wines and spirits worldwide.
Pernod Ricard must find ways to connect and integrate its own brand better with its acquisitions, especially Seagram in the current context, to create a cohesive corporate brand image. As I say in my strategy document, the time for embarking on a new corporate brand strategy for Pernod Ricard’s next journey was over 20 years ago. That said, it makes sense to evaluate the Seagram dimension even while pursuing a differentiated brand strategy now.
Pernod Ricard’s brand portfolio in light of new corporate brand strategy
Since the recommendation is for Pernod Ricard to build its corporate brand, by making the world better and more discerning consumers of wines and spirits, the company must also reconsider its brand portfolio in the context of where, and what phase of the wines and spirits journey the consumer is in.
It is well known and widely accepted in the industry that consumers typically start with inexpensive and more popular drinks and brands, continuously moving up the wines and spirits hierarchy to better reflect who and what kind of consumer they are, as well as their station in life. This suits Pernod Ricard perfectly as it makes their job of making better and more appreciative consumers somewhat easier, considering consumer behaviour already tends this way.
However, if one looks at how the company views its brand portfolio currently, it is driven more by price/value as well as by geographical importance. This is a typical manufacturer way of looking at markets and brands, with a view as to how to allocate resources – both people as well as budgets – across the board. It is true, that brand and marketing managers for an IMFL or even a lesser-known Scotch whisky brand would be quite different in calibre and experience from those responsible for Chivas Regal or Martell, even if it be their ambition to one day manage these for the entire world, or at least the key markets.
However, if Pernod Ricard were to align its brand portfolio as well as people and resources allocation, based on its new strategy, it should be guided most by how to compete better with Diageo.
- Since Diageo is a Goliath and a goliath in whiskies, Pernod Ricard must focus hardest on whiskies. Beef up whisky portfolio, with a new American Bourbon Whiskey, as I say in my strategy document. Introduce relevant innovations in Scotch Whisky range, especially to appeal to younger drinkers. There is a ladder of consumption even within whiskies, so help consumers trade up with ease.
- Focus on strength in terms of wider repertoire of wines and spirits. Therefore, ratchet up the importance of champagnes, cognac and wines. Pernod Ricard should acquire a good French Chateau wine brand as also a well-regarded South African wine. With this, Pernod Ricard’s wine collection would boast some of the best in the world – Australian, American, French and South African. Here, the direct competition is not Diageo so much as it is individual wines, champagnes and cognacs, with many of the iconic brands belonging to LVMH.
- Other white and brown spirits that are extremely popular such as rum, gin, vodka. These are especially popular with young, trendy drinkers and tend to be party drinks usually because of their mixability as cocktails. Here, Pernod Ricard’s well-known brands can do even better with the right tips and guidance from the company that consumers will appreciate. In this context, I have shared my thoughts on a new brand strategy and communication idea for Absolut Vodka previously on my blog which you might want to read.
With this kind of brand portfolio and hierarchy, the advantage is that Pernod Ricard can concentrate on helping the Seagram’s 100 Pipers or Passport Scotch drinker to move up to Ballantine’s or Chivas Regal. And shift the Seagram’s Royal Stag or Seagram’s Blender’s Pride consumer to Seagram’s 100 Pipers and Ballantine’s sooner rather than later. All this, without having to go through the geographical/country/region complex structure of templates, approvals, etc.
By considering category as the determinant of the brand hierarchy, Pernod Ricard will be better focused on brands, innovations and nimbler responses to competition as and when required. This will also ensure that the company builds a repository of expertise, knowledge and experience for each of these important categories, irrespective of where they are located. The finer nuances of differences in markets from country to country can all be captured within the complete understanding of the overall category.
What of Seagram helps Pernod Ricard
Without a doubt, the large portfolio of brands that the company acquired from Seagram, which straightaway made Pernod Ricard the world’s No 2 wines and spirits company. As I have written earlier, many of these brands come prefixed with the Seagram brand name.
Whether these brands need to continue with the Seagram brand name is something that needs closer examination. From my understanding of the India experience, the Seagram brand needed explanation and amplification at the time of the company launching in India. To this extent, the Seagram name connected – even if only subliminally – the local IMFL whisky or 100 Pipers Scotch Whisky with the Chivas Regal and The Glenlivet in consumers’ minds.
I think it would be fair to say that 30 years later, most of these brands can stand on their own feet and hold their own ground against competition without the Seagram name. Of course, it would be best to research this aspect among whisky consumers first before deciding on any course of action. Then too, any such decision to drop Seagram must only be taken if it hinders Pernod Ricard’s brand building in any way. Or if the company’s license to use the Seagram brand expires.
I must add that there are some brands with the Seagram name which won’t be able to drop Seagram that easily. Seagram’s Extra Dry Gin, for example. This is because Seagram is the main brand here. Dropping Seagram in this case would require it to be rebranded as a new brand. It would be the same with Seagram’s 7 Crown, an American blended whiskey that was acquired by Diageo.
If Pernod Ricard can continue to use the Seagram brand name and decides to do so, it must also examine the significance of the decision from a longer-term perspective. What does it intend to do with the Seagram brand name? Build a stable of whisky and gin brands under the Seagram name? And would that not hinder the process of integrating the acquired brands with Pernod Ricard, the new owner company and custodian?
These are questions that must be examined more deeply and research too would help guide the final decision.
Then, there is Seagram’s advocacy of responsible drinking. A long tradition of the company, it has helped the company consistently communicate the message of quality through responsible drinking. It also helped Seagram strengthen its relationship with institutional establishments such as bars, restaurants and hotels by covering their cost of taxi drop-offs for customers who had consumed one too many.
I would recommend that Pernod Ricard continue with this tradition, and continue to communicate responsible drinking as a mark of being a better drinker. In the strategy document, I mention how Diageo seems to be increasingly usurping this role especially in India, with Pernod Ricard going easy on it.
And finally, there is Seagram’s association with the arts. I am not sure how much of Seagram’s association with music and cinema – thanks to Bronfman’s interest and investments in it – Pernod Ricard wishes to continue with. The strategic investments are now with Vivendi; Pernod Ricard might be better off allowing individual brands to associate themselves with the arts as and when appropriate. I had recommended that Mumm Champagne take on principal sponsorship of the Cannes Film Festival on a continuing basis, as it is right up the brand’s red carpet!
Building the case for a strong corporate brand
Re-examining the brand connect between Pernod Ricard and the company it acquired, Seagram, tells us the importance of building a strong corporate brand. While we leave it to consumer research to tell us the strength and salience of the Seagram brand and whether Pernod Ricard wishes to continue with it or not, it is clear to me that many of the individual product brands under the Seagram corporate brand at least in India are stronger than the Seagram corporate brand.
And while we at Ogilvy Delhi did build the Seagram corporate brand before the company launched its Seagram whiskies in India, it appears that the effort into building individual brands was greater over a longer period of time – 30 years now – with the result that these individual whisky brands can now do without the Seagram prefix. Of course, I must add that India was the only market at the time and possibly ever, to build the Seagram corporate brand through communication.
It clearly wasn’t enough. This has helped inform my thinking on brands for the past 20 years or so, in that corporate brands must always be built alongside individual product brands. Otherwise, the corporate brand remains an empty shell while individual brands gain salience and traction. And when the time comes for the corporate brand to really play its parental role and stand behind its individual brands, it is possible that it counts for very little.
This is most apparent when we consider what has happened to the Seagram brand after it sold its business in 2000 to Pernod Ricard, Diageo and Vivendi. From what little I have been able to read online – including on Wikipedia, which is not saying much – Seagram continues as a brand of ginger ale, coolers and mixers, club soda and the like, and this too mostly in the US and Canada. It also continues as Seagram’s Extra Dry Gin which is with Pernod Ricard and Seagram’s 7 Crown Whisky which is with Diageo. Then, there are a host of whiskies like the ones I have been writing about in this article which have the Seagram name, but can easily do without it.
If this is about the hollowing out of Seagram as a corporate brand and its diminished value (and I don’t mean the financial valuation), it is equally about what can happen to Pernod Ricard one day if it doesn’t concentrate on building its corporate brand as well. Pernod Ricard can take consolation from the fact that its corporate brand was born as the merger of two separate drinks brands in France, Pernod and Ricard, and to this extent it might endure longer. However, companies would do well to treat this as a cautionary tale with the writing on the wall: Treat your own corporate brand as important as your product/service brands and invest adequately in it over time, especially if it is carried into product/service brands as well. Else, they will be like empty shells scattered on the sands of time.
Peripatetic Perch 