Pernod Ricard gambles on cheap Royal Stag
Company aims to sell 1m cases of spirit
Pernod Ricard Thailand Co Ltd, an importer of spirits and wine, is branching out its portfolio into the middle-income spirits market dominated by Thai Beverage Group (ThaiBev), which is owned by billionaire Charoen Sirivadhanabhakdi.
The company’s managing director, Quentin Job, said that over the past four years the company has focused on expanding its range of alcoholic drinks for the premium segment with four main brands: Chivas Regal, Absolut Vodka, Jacob’s Creek and Ballantine’s.
Now it has decided to enter the market for liquor priced below 300 baht per bottle by introducing Royal Stag, an imported whisky blend, which it believes matches the economic situation in Thailand given its slow recovery.
This market for middle-income drinkers is valued at 62 billion baht a year, Mr Job said.
“Though the middle spirit market segment in Thailand has been flat over the past few years, we are optimistic about the future of Thailand’s economy,” he said.
The company expects local sentiment for spirits to improve later this year as the festive season nears.
“Royal Stag is the biggest product we’ve launched in a decade,” Mr Job said. “It will help boost the growth of the middleincome, imported spirits segment this year.”
Royal Stag, or Seagram’s Royal Stag, has been marketed in over 20 countries worldwide, including China and India. It is now available at retail stores in Thailand, including convenience stores and supermarkets.
Mr Job said the company has j umped i nto this segment because it is a blue ocean market.
Some 26 million cases (12 bottles/case) of imported spirit products priced under 300 baht per bottle were sold here last year.
This market is controlled by two brands: Blend 285 and Sangsom, both distilled and distributed by ThaiBev.
The market for premium imported spirits saw sales volume of 1.7 million cases last year.
“I believe that Royal Stag will create a new phenomenon in the industry because of its affordable price, the differentiated bottle shape, and because Seagram has been trusted by consumers around the world, and for 15 years in Thailand,” Mr Job said.
The company expects to sell a million cases of Royal Stag in the first year, potentially driving Thailand to become one of Pernod Ricard’s fastest-growing markets among its Asia network.
Pernod Ricard’s sales in Thailand are tipped to grow by a double-digit rate next year. Growth this year was under 10%.
When quizzed about the taxation scheme for alcoholic drinks under the new Excise Tax Act, Mr Job said he was not concerned.
“The Thai government is now open to foreign investors,” he said. “The competition in the alcohol business will be fairer to all players, both local and international brands.”