Jameson: The Taste Above All Else Strategy

Abstract

According to Report Linker (2012), the value of the global spirits market exceeded $262 billion in 2010, while growing at an above 3% rate year-on-year. The market is expected to exceed $306 billion in 2015, representing a 17% increase in five years. Market volume exceeded 19,000 million liters in 2010 and is forecast to grow by 10% by 2015, reaching 22,000 million liters. The whiskey category leads the market, with 26% market share. The whiskey market is segmented into Scotch (61%), US (21%), Canadian (15%) and Irish (3%) whiskies (IWSR-International Wine & Spirits Research 2011; Davy Research 2011).

Pernod Ricard is the world’s second-largest spirits company (volume) and co-leader in the Premium spirits segment. The company’s key competitors on a global scale are Diageo, Bacardi-Martini, Brown-Forman, Moet-Hennessy, Beam, Constellation Brands, Gallo, Campari, Remy Cointreau and local players, such as UB Group (India) and CEDC (Poland). The company was founded in 1975, pursuant to the merger of Pernod SA and Ricard SA. “In 1988, the Group took over Irish Distillers” (Pernod Ricard Annual Report 2011/2012), manufacturer and marketer of Jameson.

Pernod Ricard’s portfolio includes ABSOLUT vodka, Ballantine’s, Chivas Regal and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Kahlua and Malibu liqueurs, Mumm and Perrier-Jouet champagnes, as well as Jacob’s Creek and Brancott Estate wines. The company has segmented its brand portfolio according to the so-called House of Brands structure, which comprises the following segments: global icons, strategic premium spirits brands, strategic prestige spirits & champagne brands, key local spirits brands and priority premium wine brands (pernod-ricard.com). Jameson is part of the strategic premium spirits brands, also featuring Ballantine’s.

From its acquisition in 1988 up until 2012, Jameson has been growing in volume at a rate of 10%, from 0.4 million 9-litre cases to 3. 9 million. “One of the key means in which Jameson has been able to overcome the effects of the recession is by targeting "pre-commitment" young men aged 25–34 years old” (Datamonitor 2010). As reported by Datamonitor, Irish whiskey is particularly appealing to this consumer segment, by virtue of its smooth taste.

The key opportunity for the brand was to maintain double-digit growth in a highly competitive, mature market (whiskey), populated by strongly entrenched brand players (i.e. Jack Daniels, Johnnie Walker), by enhancing its appeal to a younger demographic.