Pernod Ricard is to significantly increase its minority stake in Sovereign Brands’ portfolio of super-premium wine and spirits brands. The French drinks powerhouse said this additional investment will strengthen the already successful and ambitious long-term partnership initiated in September 2021.
At the closing of this transaction, the group will fully consolidate Sovereign Brands in its financial statements due to various call options through which Pernod Ricard may look to further increase its stake in the partnership in the future.
Sovereign Brands is a family company founded by brothers Brett and Brian Berish, described by Pernod Ricard as among the industry’s most innovative and creative beverage alcohol brand builders, in the world’s leading spirits market, the US. It is one of the fastest-growing companies in the beverage alcohol industry. The consolidation of Sovereign Brands is expected to be accretive on Pernod Ricard’s operating margin.
Over the last 12 months, and in the frame of their long-term partnership, Pernod Ricard and Sovereign Brands have already significantly accelerated the growth of Sovereign’s brand
portfolio, including French super-premium sparkling wine Luc Belaire (circa 1 million 9L cases in 2021); a range of Caribbean rums sold under the Bumbu brand (circa 300K 9L cases); the Brazilian gin McQueen and the Violet Fog; and the French liqueur Villon. Both companies have also initiated a number of joint incubation projects, with an initial brand planned for a full-scale launch in the coming months.
This additional investment is in line with the Pernod Ricard strategic plan ‘Transform & Accelerate’ and reflects the ambition to further enhance its consumer-centric portfolio development and invest in anticipated growth categories. “This partnership is a winning combination of like-minded companies committed to build global brands that tap into cultural trends and foster strong brand advocacy,” Pernod Ricard said.
Closing, which is expected to occur in November, remains subject to fullfilment of customary closing conditions, including regulatory clearances.
“Our partnership with Sovereign Brands has already proven to be very successful, with brands such as Bumbu and Luc Belaire now reaching an ever-growing number of consumers in the US and abroad. I believe we are perfectly matched as two consumer-centric companies with a shared commitment of creativity, innovation and brand building,” said Pernod Ricard Chairman and CEO Alexandre Ricard.
Sovereign Brands CEO Brett Berish stated : “In the year since we first announced our partnership with Pernod Ricard, everything that we could have hoped for from the relationship has
come to pass. With the upcoming launch of our innovative first joint brands together, it’s the perfect time to deepen our partnership.”
