Chairman & Chief Executive Officer, Pernod Ricard SA
Alexandre Ricard & Ciara Byrne on What companies need to do to survive | TNW Conference 2018
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About Alexandre Ricard
In February 2020, Alexandre Ricard stated that Pernod Ricard assumed a gradual recovery in China would begin in March, with a return to a "somewhat normal situation" by June, excluding Hubei province. He noted that China is the company's second-largest market and that the main beverage lines affected were Martell cognac and Chivas scotch whiskey. Ricard emphasized that the assumptions were not market predictions but were provided for transparency. He also said the company was following local health and safety guidelines and remained focused on delivering its three-year strategic plan, "Transform and Accelerate," which he described as delivering on expectations with diversified growth across regions and brands. Ricard indicated that Pernod Ricard would continue to pursue bolt-on acquisitions and partnerships, as it had done with brands like Malfi gin and Jefferson's bourbon, while also disposing of assets that no longer fit its strategy.
Transcript (27 segments)
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Host0:07
We have a very full house likely here today, so hopefully you're all really interested in what we're about to talk about. My guest today is Alexandre Ricard, CEO of Pernod Ricard, a company co-founded by his grandfather in 1975. It makes brands like Martell cognac, Absolut Vodka, and Jameson Irish whiskey, and is worth about 32 billion euros with 18,000 employees in 85 countries. Alex, this is a large international company but also a family business. How does that change the way you approach leading the business?
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Alexandre Ricard0:57
First of all, it gives you a sense of responsibility and purpose, especially when you know you have a family behind it. Secondly, it allows all our colleagues to do their day-to-day business but also think long term. Then two focus areas: people, because we are a people business, and our consumers. These four elements are critical, especially in a family business.
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Host1:55
Do you think this long-term focus is unusual in a business world that tends to be more short-termist?
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Alexandre Ricard2:06
The world is extremely volatile with short-term pressures. Having a sense of purpose and a shareholder behind you for generations allows you to manage a balance between short term and long term. Of course, you also have to solve short-term problems.
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Host2:30
You said you want the business to stay true to the values of your grandfather, Paul Ricard. What are those values and how are they continued within the company?
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Alexandre Ricard2:43
The values are critical for long-term survival. They started with our founders and we nurture them today. Value number one is entrepreneurship: the mindset to capture growth opportunities, embrace change, and leverage new technology. Second is mutual trust, especially important in a decentralized business—it allows us to be fast and agile. Third is integrity: the integrity of our business, brands, and products. We control the supply chain from grain or grapes to glass to ensure confidence.
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Host3:01
So can you explain the concept of terroir to those who are not familiar with it?
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Alexandre Ricard4:38
Almost all our products have an origin. Wines come from specific wine regions with their own terroir—the vineyard. The same applies to spirits: Irish whiskey comes from Ireland, Scotch from Scotland, cognac from the cognac region in France. We use natural ingredients like grains, barley, or grapes. Climate impacts yields and quality, affecting harvesting times. It is critical to our business. My grandfather was an environmental activist in the 1960s and launched the Paul Ricard Oceanographic Institute for the protection of the Mediterranean Sea.
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Host5:59
Where are you seeing the biggest impacts of climate change on Pernod Ricard? In particular regions or products?
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Alexandre Ricard6:30
It is global. We see temperatures rising and seas becoming agitated. It impacts our ingredients. When you became CEO three years ago, you took charge of a company with brands that have been around for two or three hundred years, all tied to terroir. How did you decide what to preserve and what needed to change?
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Host7:00
So how did you decide what to preserve and what needed to change?
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Alexandre Ricard7:30
The board announced my appointment in 2012, giving me two to three years of transition. I was asked to define three key objectives; I came up with two. First is growth: healthy growth from top line to performance. Second is mindset: the entrepreneurial spirit, winning mindset, and capacity to embrace change. We refocused completely on the consumer, shifting from a segmental view (tequila, gin, whiskey) to a consumer-occasion-based organization.
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Host8:30
That brings me to your tagline: 'Créateur de convivialité'. For non-French speakers, can you explain what that means?
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Alexandre Ricard8:45
Conviviality means togetherness: sharing genuine, authentic moments with people—moments we remember. Our vision is to have our brands, services, and experiences be part of these moments. It also implies responsibility and sustainability.
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Host9:30
So you changed your focus from drink categories to moments of conviviality. What kind of moments did you come up with?
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Alexandre Ricard9:45
In the US they call them demand spaces; in Asia, moments of consumption. For example, the aperitif moment before lunch or dinner, targeted with brands like Ricard or champagne. Then the high-energy moment later at night for tequila, vodka, Scotch. The romantic dinner moment for wine and champagne. In Asia, the 'deal over meal' moment for cognac. We reorganized marketing teams by these moments and use social listening to categorize accounts.
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Host10:45
In a world where socializing happens online, how do you encourage people to create these real-life moments?
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Alexandre Ricard11:00
In the early '90s, when the first dating apps appeared, people worried that wine and spirits would suffer. Actually, social networks help people meet, and they eventually meet in person—often over a drink. Technology is an enabler. My grandfather's tagline was 'Make a new friend every day'; with social networks, you can make hundreds.
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Host12:00
This brings me to societal trends. The wine and spirits industry is a barometer of society. Can you tell me about some of those trends?
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Alexandre Ricard12:15
One big trend is healthier lifestyles: drinking less but much better. That suits our premiumization strategy. Second, people look for substance and heritage, which ties to terroir and our old brands. Third, consumers love innovation, and we can use our heritage to innovate with substance.
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Host13:30
What does innovation mean in your business?
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Alexandre Ricard13:45
For example, Martell was the first cognac shipped to the US. Our innovation team created Martell Blue Swift, a VSOP finished in American bourbon casks. Innovation can be about products, experiences, or services.
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Host17:30
What are your biggest ambitions for Pernod Ricard for the next year or two, and in the longer term?
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Alexandre Ricard17:45
Our vision is to be one of the most aspirational organizations in the world. We survey our 18,500 colleagues every two years; 94% are proud to be members, and 90% are committed. Sustainability and responsibility are critical. I want our brands to be associated with every nice, memorable moment in people's lives.
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Host19:00
If you were not CEO of Pernod Ricard, what would you be doing?
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Alexandre Ricard19:15
I would probably build my own whiskey distillery. I have experience from running part of our whiskey business. There's so much innovation we can do with blending and packaging. I love this business.
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Host20:30
That's a fantastic note to finish on. Please join us later on the main stage for the final of the Chivas Venture social entrepreneurship competition at 5:30. Thanks to everyone, and thank you, Alex.