Positive results alongside positive action, as it announces industry-first use of technology and introduces its first zero direct carbon distillery.
Chivas Brothers, the Scotch whisky business of Pernod Ricard, released its FY21 (July 2020 - June 2021) full year results at a press conference this morning.
The results reaffirm the resilience of Chivas Brothers’ brand portfolio, with total organic sales up +6%, boosted by a strong performance in domestic markets (+16% excluding travel retail) which have expanded beyond pre-pandemic levels.
The pandemic’s continued impact on global travel retail was offset by double-digit performance in domestic regions across the whisky maker’s four strategic brands: Chivas +13%, Ballantine’s +12%, The Glenlivet +26% and Royal Salute +32%.
Sales were particularly strong in Asian markets where lockdown restrictions have been lifted or eased, with China, Taiwan Market, and South Korea registering growth of +47%, +20%, and +46% respectively. As in recent years, strong performance was recorded in Eastern European and Latin American markets, with Poland and Russia growing +19% and +17% respectively, and Brazil growing beyond pre-COVID levels, up +60%.
The strength of The Glenlivet brand in the US was instrumental in securing the business’ +19% sales growth in North America, despite the impact of COVID restrictions and the tariffs on Single Malt Scotch which were in effect for most of FY21.
Performance across strategic brands
Despite continued exposure to travel retail, Chivas returned to growth ahead of a transformational year for the brand, with global sales up +3% and double-digit growth in China, Turkey, the US and Russia. An evolution of the Chivas brand, including a redesign of its iconic Chivas 12 year old, was announced at the press conference.
Ballantine’s registered an organic sales increase of +1%, despite its prestige range’s exposure to travel retail. This growth is driven by innovation such as Ballantine’s 7 Bourbon Cask Finish and the successful roll-out of the There’s No Wrong Way campaign.
Attracting new consumers with new moments of consumption beyond the historic importance of the travel retail market saw Royal Salute post double digit growth in several key markets, with particularly strong performances in China, South Korea and the US. Total organic sales stood at –6%.
The Glenlivet continued its dominance of the Single Malt category in the US, with the launch of The Glenlivet Caribbean Reserve and continued strength of its flagship Founder’s Reserve propelling the brand forward. Strong double digit growth in China and across key Asian markets were the primary growth drivers of the brand’s total organic sales at +19%.
At the press conference, Chivas Brothers introduced its new Chairman and CEO, Jean-Etienne Gourgues, who joined in July from Pernod Ricard China, where he served as Managing Director. Jean-Etienne succeeds Jean-Christophe Coutures who served for three years.
Commenting on the results, Jean-Etienne Gourgues said:
“It’s clear from these results that we are making a steady return to our pre-COVID momentum, already exceeding this in domestic markets. The breadth of our portfolio is our greatest asset, and we have continued to invest in innovation and creative campaigns despite the challenging year. The suspension of US tariffs on Single Malt Scotch will certainly boost the industry’s recovery, however we maintain that a cut in spirits duty should be included in the next UK Budget, and Scotch should be prioritised in ongoing trade negotiations - with a particular focus on reducing the 150% tariff on Scotch exports to India.”
New use of technology propels Chivas Brothers towards net zero distillation by 2026
Jean-Etienne Gourgues used the press conference to announce that the company was targeting net zero distillation by 2026. To achieve this the company will drive super low energy distillation as a priority and then decarbonise any residual carbon emissions to reach net zero. A major step towards this target was announced at Glentauchers with a Scotch industry first, using high-efficiency Mechanical Vapour Recompression (MVR) fan technology for pot still distillation. In the distillation process, MVR recovers the energy from the spirit vapour and uses it to boil the still, leading to a massive 90% energy reduction on a single pot still at Glentauchers - a major single malt component of Ballantine’s. The ambition - following full Glentauchers implementation - is to roll out MVR across all viable sites by 2026.
Jean-Etienne Gourgues also announced Braeval – a core single malt component of Chivas – as Chivas Brothers’ first zero direct carbon distillery, following a successful switch to a rapeseed residue based bio-fuel. The successful switch will save 6,671 tonnes of carbon per year at Braeval and the bio-oil will next be introduced to Glentauchers.