(AOF) – Pernod Ricard France announces the acquisition of a majority stake in Cockorico, a young French company specializing in ready-to-serve premium cocktails. Cockorico was founded in 2019, in Lyon, by 3 experts in the spirits and hospitality sector in the person of Marc Bonneton, an emblematic figure in mixology, associated with entrepreneurs Julien Maurel and Geoffrey Clavel. Together, they have developed the French leader in ready-to-serve cocktails, a fast-growing category primarily designed for bar, hotel and event professionals.
Cockorico thus responds to the growing demand for premium cocktails beyond the world of specialized cocktail bars. While the mixology trend is experiencing strong acceleration, Cockorico has designed a range featuring the great cocktail classics such as the Old Fashioned or the Negroni, supplemented by timeless ones like the Cosmopolitan and the Mojito.
Philippe Coutin, Chairman of Pernod Ricard France, said: “We are very pleased with this partnership with Cockorico, which has experienced exceptional growth since its creation. We are convinced that we will go further together by drawing on both the strength of our distribution network and our expertise in ready-to-eat products. It is also the prospect of developing new projects together by combining our very complementary capacities for innovation”.
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Key points
– World number 2, behind Diageo, in wines and spirits, born in 1975 from the merger between Pernod, founded in 1805, and Ricard, in 1932;
– Activity of 10.7 billion euros, balanced between Europe (29% of sales), the 2 Americas (29%) and Asia (41%) and provided 63% by the 13 international strategic brands, 18% by local strategic brands, 6% by specialty brands and 5% by strategic wines;
– Business model based on a decentralized organization between the head office, 6 brand companies -The Absolut Company, Chivas Borthers, Martell-Mumm-Perrier-Jouët, Irish Distillers, Havana Club International, Pernod Ricard Winemakers- and 5 market companies in support of international and local brands;
– Capital held at 14.01% (+20% of voting rights) by the founding family, ahead of employees (1.4%), Alexandre Ricard, CEO, chairing the 14-member board;
– Very healthy financial structure, with activity generating cash flow of €1.8 billion, with net debt of €8.7 billion, i.e. a net debt/EBITDA ratio of 2.4 as of June 30, 2022.
Challenges
– “Transform & Accelerate” strategic plan with 4 accelerators -dedicated positioning for each brand, premium and luxury services, innovation and digital acceleration;
– A mission to cultivate the magic of human relationships by “preserving to share” with the ambition of driving and influencing the industry via a growth model based on digital and artificial intelligence the “conviviality platform”: collection and analysis data at the service of supply, in each market for the “right product at the right time, for the right consumer and at the right price”;
– Environmental strategy “S&R roadmap 2030” in 4 pillars: circular production with 50% reduction in CO2 emissions by 2030; 100% renewable electricity on production sites and 100% recyclable or compostable packaging by 2025 / preservation of the land through regenerative agriculture programs, support for + 10,000 farmers and through projects to maintain the biodiversity and water reuse / human enhancement with 0 gender pay gap achieved in 2022; responsible consumption, more than 134 million people reached by the “drink more… water” campaign.
– Segment not very dependent on household consumption, hence the rise in mature countries with strong positions in white spirits, rums and aniseeds (Ricard, No. 1 worldwide), whiskeys and liqueurs (No. 2) , cognacs, brandies and bitters (no. 3);
– Strong pricing power giving visibility to profits and preservation of margins.
Challenges
– Strong seasonality: 2/3 of the activity achieved in the first half (July-December), 1/4 in December and sensitivity of profits to sales in Asia and the Americas;
– Russia-Ukraine war: stoppage of exports to Russia;
– Record financial year in 2021-22 with more than €10 billion in revenue;
– Rapid implementation of the digital transformation and good competitive advantages to achieve the medium-term objectives 2023-2025
– 2021-2022 dividend of €4.12 (+32%) and share buyback program of €500 to 750 million over 2022-2023
Find out more about the Agrifood sector
Soaring energy prices and a call for help
In the past, energy represented a fixed cost of 3% of turnover. This year, this percentage rises to 5% or even 7% for VSEs-SMEs, according to Ania (National Association of Food Industries). Professionals are very worried because until the end of 2022 they generally benefit from coverage to cushion these increases. However, they have not been renewed for 2023 and after. Consequently, 25 of the main inter-professional organizations (Intercereals, Inaporc, Semae, etc.) are calling on the State for help in the face of the erosion of their margins and their capacity to investment.
The State has proposed several devices, including an “electricity damper”, which are deemed insufficient. The organizations also deplore the failure of European negotiations to achieve a tariff shield to avoid distortions of competition. Agriculture and agri-food require a maximum ceiling price of €180/MWh, while many companies buy at prices above €500/MWh on the French market.