Pernod Ricard Steadies After a Shaky Start to the Year
French spirits giant Pernod Ricard posted first-quarter net sales of EUR 2.23bn, down just 0.9% organically — a smaller fall than feared — with the US down 10% and China down 25%, but volumes up 6% and the rest of the world growing.
The numbers
Pernod Ricard — owner of Jameson, Absolut, Ballantine's, Malibu and Martell — reported Q1 fiscal 2026-27 net sales of EUR 2,234m on 15 October, down 0.9% organically and 6.3% on a reported basis. The bigger reported drop mostly reflects the disposal of its Imperial Blue and wine businesses rather than weaker demand.
Encouragingly, volumes actually rose 6%, and the company held its full-year guidance of broadly stable organic sales. After a brutal couple of years, 'less bad than expected' was enough to lift the shares.
A tale of two maps
The weakness is concentrated: the US fell 10% and China 25%, both dragged down by retailers and distributors running down inventory rather than a collapse in drinking. Strip those two out and the rest of the world grew 4%, with India up a striking 19%.
That split matters for any consumer brand. The world's two biggest economies are cautious and de-stocking, while emerging markets — India especially — are where the growth is. Jameson, Ballantine's, Malibu and Perrier-Jouët all grew; Absolut and Martell slipped.
What marketers should take from it
The headline lesson is Pernod Ricard's response to the downturn: it is keeping advertising and promotion investment at around 16% of net sales. In other words, it is protecting the brand through the dip rather than slashing marketing to flatter short-term profit.
That is the textbook move. Decades of evidence show brands that maintain investment in a downturn gain share when demand returns, while those that cut spend take years to recover. For smaller businesses the principle holds: when times are tight, cutting marketing is usually the most expensive saving you can make.
Our take: the volume growth under a falling sales line is the real tell. Demand is there; it's the supply chain and two big markets that are wobbling. Hold your nerve and your brand investment, and the recovery rewards you.
Quick FAQ
How did Pernod Ricard perform in Q1 FY27?
Net sales were EUR 2,234m, down 0.9% organically and 6.3% reported (the larger reported fall reflects business disposals). Volumes rose 6% and the full-year outlook was held.
Which markets were weak?
The US fell 10% and China 25%, mainly due to inventory de-stocking. The rest of the world grew 4%, led by India at +19%.
What's the marketing lesson?
Pernod Ricard is maintaining ad and promotion investment at about 16% of sales through the downturn — protecting the brand to gain share when demand recovers.
The number I'd circle isn't the sales line — it's that Pernod Ricard is holding marketing investment at around 16% of net sales while the US and China wobble. That's a business that understands downturns are when disciplined brands take share. Cutting marketing to protect a quarter is almost always the most expensive saving you'll ever make. — Daniel Nikolla, Founder of Merx Marketing
Takeaway: volumes grew even as sales dipped — demand is there. The brands that hold their marketing nerve through a downturn are the ones that gain share in the recovery.
If the next few quarters got tougher, would you protect your marketing budget — or be tempted to cut the very thing that drives recovery?
If you would like to know more about this topic, please contact us on danieln@merxmarketing.co.uk
Sources: Pernod Ricard (Business Wire), Reuters and Stratégies.
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Written by Daniel Nikolla, Founder of Merx Marketing Ltd and Marketing Minute
