Pernod Ricard Headquarters
In 2023, Pernod Ricard captured attention by divesting its wine division to Australian Wine Holdco Limited (AWL), a transaction that featured the popular entry-level brand Jacob’s Creek. This tactic enables Pernod Ricard to intensify its commitment to premium offerings, especially in spirits and champagne. The sale encompasses a diverse portfolio of well-known international wine brands crafted by Pernod Ricard Winemakers, amounting to over 10 million 9L cases yearly from three regions consisting of Jacob’s Creek, Orlando, and St Hugo from Australia, Stoneleigh, Brancott Estate, and Church Road from New Zealand, alongside Campo Viejo, Ysios, Tarsus, and Azpilicueta from Spain.
Following suit, Treasury Wine Estates, Australia’s largest wine producer, is also shifting its strategy. They are divesting their entry-level brands, including Wolf Blass, to focus more on their premium selections, with Penfolds spearheading this initiative.
The Wolf Blass House of The Dragon wine.
What’s prompting this shift? The explanation lies in the statistics — and accompanying challenges. Though entry-level wines have historically been a volume-centric market, their profit margins are minimal. Additionally, global wine consumption has been declining, reaching its lowest level in 27 years. The Chinese market, once flourishing for wines, has significantly decreased its consumption. Meanwhile, the younger generation’s interests and preferences are split. Rising production costs only exacerbate margin pressures.
Moreover, it’s not only the demand that’s evolving; the supply side is also undergoing changes. Global wine production is currently on a downward trend due to economic adjustments after periods of surplus, as well as the increasingly erratic climate conditions. In France, the situation has become urgent enough to prompt discussions about uprooting certain vines.
This convergence of factors is pushing the industry to recalibrate, with major players gravitating towards the premium sector, where better margins can be achieved — provided, of course, that brand strength is sufficient to support such a shift.
As industry giants consolidate their positions, what implications does this have for smaller producers that create exceptional wines? In this increasingly tough landscape, one can only hope that those who produce outstanding wines without the support of a multinational brand can still find their niche.
Wine embodies more than mere consumer goods; it represents a cultural touchstone. It continues to be an essential thread woven into the complex fabric of social exchanges. It has traditionally connected cultures, generations, and emotions. As the industry advances, it is crucial to ensure that wine retains its significance, remains shared, and is accessible to everyone.
Biography of Ludovic Tendron
Ludovic Tendron
Beginning my journey as a lawyer with Hewlett Packard in 1998, I swiftly discovered that my enthusiasm was in the vibrant sectors of hospitality and luxury. I joined the Accor group in 2000, dedicating 14 years to refining my skills in hotel development, asset management, legal frameworks, and establishing valuable brand collaborations. This venture has granted me a deep insight into the hospitality landscape.
In 2014, I established my consultancy firm (Ludovic), providing strategic guidance on business growth across the hospitality, luxury, and lifestyle industries worldwide. My services include, among other aspects, negotiating crucial hotel agreements, building valuable partnerships, identifying projects, distributors, and investors, M&A, and hosting hospitality events.
Ludovic Tendron
Acknowledging the significance of unforgettable gastronomic experiences, I founded Vitisasia in Singapore in 2011. Through exclusive events featuring renowned chefs, leading wine producers, luxury brands, and media, I honed my attention to detail and ability to anticipate needs. These gatherings not only enhance guest enjoyment but also foster a robust network and comprehensive understanding of the hospitality and luxury sectors beyond mere contractual agreements.
Negotiation lies at the core of my endeavors, a skill I have developed over the years, culminating in the publication of my book, “The Master Key: Unlock Your Influence & Succeed in Negotiation,” and the launch of my podcast, “CEO Insights.” I provide tailored negotiation training and innovative speaking engagements for clients and their teams, equipping them with effective tools for negotiation success.
Ludovic Tendron
Motivated by historical figures who leveraged wine and culinary experiences as a powerful influence, I have adeptly intertwined gastronomic experiences into my negotiation strategies to achieve significant outcomes.
I am fervent about gastronomy and thrive on crafting unforgettable experiences. I also possess a passion for wine and am an avid collector. From 2011 to 2018, I established and managed a wine fund called Wine Legends, focusing on the acquisition and investment of fine wines. This journey deepened my comprehension of the wine sector and its potential as a valuable asset class.
For further details about Ludovic Tendron, visit his website here: www.ludovic.online.
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