Reuters was nice enough to call us for some pull quotes regarding the Pernod purchase of Absolut. In the interview we noted that the market for vodka starts ups had “jumped the shark” and we knew this to be true given recent entrants to the market (Trump vodka anyone? Kirkland Vodka at CostCo?) and quotes we get sent from Fizz Corp members like this one from Lucy Grand in Seattle, “There’s always a better vodka price coming in the door so I just play one vendor off on another and take what’s cheapest”. 

 We don’t think vodka is a “dead market” as reported by Reuters. In fact we know it to be a huge, robust and growing market. This is why the P-R purchase of Absolut makes so much sense to us. Vodka start ups are done. Now is the time to buy established brands and maximize their value. Best wishes Pernod!

1. Kevin Fennessey (runs Absolut in the US) and Alain Barbet (runs Pernod Ricard in the US) have worked together in the past and have a great deal of respect for one another’s talents and work. This is important as the US market is the bedrock on which global prestige spirits brands are built. If you can’t sell it well in the States it’s very hard to sell well in the rest of the world.
2. Pernod Ricard understands that the future of globally relevant spirits brands is in personalizing marketing and optimizing word of mouth networks. This understanding allows them to extend and enhance Absolut’s brand while other owners might have been stuck in the good old 80’s mind set of more print ads coupled with short skirted sampling events.
3. Pernod Ricard has a great deal of experience with prestige vodka brands through it’s work with Stoli.
4. Pernod Ricard knows how to convert a strong brand story into strong sales. Just look at the work they have been doing with Wild Turkey. 
5. Crunching the numbers and making some conservative assumptions about profit margins and likely growth reveals an 8.35 year payback on the initial investment. Damn nice numbers!
6. Pernod Ricard has an excellent track record at integrating brands and staff into their processes. Look no further than the sales numbers for the ­­­Allied Domeq acquisitions and you’ll see what we mean.
7. Absolut is a global prestige brand in a huge spirits category with blue chip positioning and consumer mindshare. Pernod Ricard is a nimble player in the spirits world and is the best positioned to take advantage of Absolut’s opportunities.