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How France's *Pernod Ricard* Pastis Became A Global Liquor Juggernaut

Paul Ricard was a visionary: in the early 1920s, he was already dreaming of selling his aniseed liquor around the world. Eighty years later, his vision has become reality, and what was a little liquor from the South of France is today one of the world&

How France's *Pernod Ricard* Pastis Became A Global Liquor Juggernaut
Philippe Escande

PARIS -- Ten years ago, Pernod Ricard, France's biggest distiller, still made most of its revenue selling its famed "pastis" aniseed liquor.

The 80-year old brand, a staple of southern France, has always been associated to quintessentially French events like the Tour de France and the sunny cafés of Marseille's Vieux Port.

Today, Pernod Ricard is No. 1 for spirits in China and the second-biggest in the U.S., with two thirds of its sales outside of Europe. In the past 10 years, the company has become an alcohol behemoth, multiplying its sales by four and its profits by six selling vodkas, whiskeys, cognac and high-end champagnes. Fourteen international brands, 12 of which were bought since 2001, are sold in more than 70 countries around the world.

Early 20th century, pastis was bootlegged in the Provence countryside, a legacy of the anti-absinthe prohibition banning all aniseed flavored alcohols. In 1932, Paul Ricard decided to launch his own pastis brand. The son of a wine-seller toured bars to convince owners and give customers a taste, modifying his recipe as he went. He understood the importance of direct distribution, and took great care in the training of his salespeople, whom he believes are essential to his business. He had a paternalistic approach, building housing for his employees, holiday resorts and retirement homes. A precursor of sorts, he organized retreats on Mediterranean islands, to promote cohesion and team building.

Early on, Ricard understood the importance of product distribution and promotion, organizing events and publicity stunts. In 1956, during a gas shortage due to the Suez Canal crisis, he replaced his delivery trucks with camels, each bearing one of the letters R-I-C-A-R-D. Today, massive promotional events, organized distribution networks and strong corporate culture are still Pernod Ricard's pillars.

Global ambitions

Ricard merged with French competitor Pernod in 1975, but the company only started spreading its international wings in 2001 when it bought a large part of Canadian distiller Seagram's beverage division. Pernod Ricard doubled in size, acquiring the famed Chivas and Glenvilet whiskeys as well as the Martell cognac. A similar acquisition of Allied Domecq for 10 billion euros in 2005 added Ballantine's, Beefeater, Malibu and the Mumm and Perrier-Jouët champagnes to the cellar.

The purchase of Swedish vodka brand Absolut in 2008 was the crowning achievement in this flurry of high-profile operations - at a price. At the eve of the global financial meltdown, Pernod Ricard financed the 20 billion euro acquisitions through cheap debt. The acquisition was finalized just three months before the financial crisis struck.

Pernod Ricard's house of cards could have easily collapsed under the weight of debt. To convince investors, it had to prove it could make difficult choices, selling about 1 billion euros in assets in 2009-2010, and making the most of its size and high-end strategy.

The company has kept a very decentralized organization. Six brands, including Absolut in Sweden or Chivas in Scoland, are responsible for the production and global strategy of their own products.

Seventy different companies around the world handle distribution and sales. This tight distribution circuit is the key to its success, especially in regards to its main rival, world leader Diago. Pernod Ricard is managed by a holding, with simple yet effective strategies for luxury branding: new packaging, higher prices and massive promotion. Most spectacular was the "renovation" of the Martell cognac, which is now the company's most profitable product. This helped Pernod Ricard conquer emerging international markets, filled with rich clients looking for status symbols.

The company's goal is to continue reaching out towards the world without putting its strong corporate culture in jeopardy.

Read the article in French in Les Echos.

Photo: Mathieu Aboudharam

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What Exactly Does Pope Francis Think About The War In Ukraine?

Seven months after Russia’s invasion, the Pope finally called on Vladimir Putin directly to stop the war. But just days earlier, Francis had offered an elaborate theory on the causes of the war, which he blamed on competing “imperialisms” of Russia and the West, and the need to have wars to sell weapons.

Pope Francis in Rome

Jeff Israely

-Analysis-

Pope Francis has not been particularly popular in Ukraine since the war began in February. Unlike other Western leaders, the pope didn’t condemn Vladimir Putin in the days and weeks after the invasion, largely limiting his remarks about the war to prayers for the victims and universal calls for peace.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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A Ukrainian colleague was furious that Francis wasn’t calling Putin out for his invasion. Having covered the Vatican for more than a decade in my prior job, I tried to explain that papal diplomacy tends not to point fingers or name names, partly in their hope of leaving church channels open for possible future negotiations.

Well, on Sunday, Francis finally pointed his finger at Putin, in what was perhaps his strongest call to date to stop the war. “My appeal goes above all to the president of the Russian Federation, begging him to stop this spiral of violence and death, even out of love for his own people,” the pope said.

In the same breath, he also urged Ukrainian President Volodymyr Zelensky to be open to negotiations. The pope also warned against the rising threat of the use of nuclear weapons. This is what popes do in times of war: They call for peace and try to save lives, hoping the message seeps into the ears and hearts of political leaders and public opinion.

Still, there are other messages that Francis has been spreading about the war that are not so obvious.

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