Pernod Ricard has launched a sweeping transformation of its business structure as the global spirits market faces mounting pressure from inflation, trade barriers, and shifting consumer habits.
Pernod Ricard aimed to cut costs by up to one billion euros by the end of its 2029 financial year, highlighting the scale of its transformation. Investors and analysts await the company’s annual earnings report, which will likely clarify how the restructuring impacts long-term strategy and financial health.
Internal documents reviewed by Reuters confirmed that the French group plans to reorganise its operations into two newly created brand divisions to streamline decision-making and restore momentum.
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The company, which owns globally recognised names like Jameson Irish Whiskey, Absolut Vodka, and Martell Cognac, has dubbed the project “Tomorrow 2,” signaling a forward-looking initiative to build a leaner, more responsive company.
Under this s, the company will group its extensive brand portfolio into two core pillars: Gold and Crystal. This move replaces its previous decentralized model in which brands operated more independently.
Gold will feature prestige labels such as Martell Cognac, Jameson Irish Whiskey, and its Champagne houses Mumm and Perrier-Jouët. Crystal will include brands like Absolut Vodka, Havana Club rum, and a range of French aperitifs.
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Pernod Ricard plans to fully implement the two-division model by the final quarter of 2025. Shared support functions will serve both groups, reducing redundancy and boosting operational efficiency.
This strategic shift comes as Pernod Ricard battles weakening sales in key global markets. Consumers in China and the United States have curtailed discretionary spending amid economic uncertainty and rising living costs.
Aggressive tariffs on French spirits, particularly Cognac, further strain the company’s margins and disrupt export flows.
In a company-wide address, Chairman and Chief Executive Alexandre Ricard confirmed that the changes will lead to job losses, although the company has not disclosed exact figures.
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Pernod Ricard has begun local consultations with labor representatives and staff in markets where it expects to reduce its workforce.
The company has already taken cost-cutting steps. It previously trimmed headcount in China after anti-dumping sanctions hit its Cognac exports.
In the United Kingdom, the company expects further job cuts following the sale of its wine business—including popular labels like Campo Viejo and Brancott Estate—to Vinarchy earlier this year. Wine had contributed significantly to its UK revenues before the transaction.
These changes mirror a broader shift across the global drinks industry, which has struggled to sustain the growth it saw during the COVID-19 pandemic. As consumers increasingly favor moderation and value, the premium segment has faced falling sales and weaker pricing power.
Pernod Ricard recently reported a three percent drop in third-quarter sales and has seen its share price fall by nearly half since early 2023.
Other major players in the industry have initiated similar changes. Moët Hennessy, the wine and spirits division of luxury group LVMH, plans to reduce its workforce by more than ten percent. American distiller Brown-Forman has implemented similar cuts, while Diageo pursues major cost savings through asset sales and operational streamlining over the next three years.
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