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Sales of Jacob’s Creek have slowed down in the USA during recent years and according to a Report, Pernod Ricard USA plans to revitalize the brand with a new range called Double Barrel. This is an interesting wine which features finishing the wine in older whiskey casks, adding to the complexity of the wine. Thus far, the Double Barrel series includes a Barossa Valley Shiraz finished for three months in Scotch whiskey barrels and a Coonawarra Cabernet Sauvignon finished in Irish whiskey casks.
The new Double Barrel wines are positioned between the Jacob’s Creek Reserve and their super premium Heritage range costing upwards of $35-$40. Jacob’s Creek retails for $12 at the Duty Free shops and the Reserve is available at $16 in India. The basic varietals retail for around Rs. 1200 Tax paid. Apparently the Double Barrel range costing around $20 is being launched across 10 U.S. markets before the national launch.
Pernod is currently producing about 30,000 cases of Double Barrel for the global market. Jacob’s Creek chief winemaker Ben Bryant is quoted in the report as saying they plan to increase the numbers to 100,000-150,000 cases within a few years.
Sales of Jacob’s Creek in the USA have been going southward since 2007, just before the global meltdown and since Australian wines in general started feeling pressure on their sales due to the quality image and pricing factors because of up-valuation of Australian dollar. The sales of the ubiquitous Jacob’s Creek hit 1 million cases in the USA in 2007, but dropped to 585,000 cases by 2015, according to a report. Jacob’s Creek has long been Pernod Ricard’s biggest wine brand in the U.S. ahead of Kenwood at around 450,000 cases.
In India, it took the lead in 2014-15 by selling over 70,000 cases, thus passing the sales of the decade-long leading importer Brindco who had cut down their brands and labels last year in order to improve profitability. With Brindco’s sales estimated to cross around 85,000 in 2015-16 and Jacob’s Creek around 80,000 (estimated figures since the company does not release its figures in India but they are released in terms of the growth/decline at the company headquarters in Paris at another date), Pernod is expected to be back at the number one spot it has had for years on the strength of Jacobs Creek.
delWine is on record saying that the Double Barrel range might be a good product for India, if there is a hint of whiskey for the die-hard drinkers or if they perceive the whiskey taste and it might even open up a new market. But It’s a matter only of conjecture, if they have done some study to ascertain this new market. JC Reserve was to be introduced over a year ago when the company was unfortunately caught in the crossfire between FSSAI and the wine and spirits industry on the labelling issues.
Incidentally, FSSAI seems to have realised that it was perhaps wrong in its approach of acting as a scourge, as seen by the food and wine industry and has announced that it is moving towards a self-regulatory regime, but only after causing irreversible damage of billions of rupees for the well-known Swiss MNC Nestle who is now limping back to normalcy after the Bombay High Court allowed it to produce and sell Maggie Noodles again. FSSAI has already announced the closure of two offices in UP a week ago, with effect from March 31.
The Aussie competitor of Jacobs Creek- Hardy’s imported by Sula has quietly stepped up its marketing activities in India and has been increasing its market share feverishly. With Treasury Wine Estates-owned Penfolds distribution going to Brindco, a very aggressive sales policy is being chalked out for its low-end but very popular Lindemans brand, it has been learnt.
It appears the strong competition and a possible price war may make Jacobs Creek face unprecedented pressure after years of smooth riding. This will be good for the consumer who may soon look at the better quality Reserve range at a very decent price.
Subhash Arora
Tags: Pernod Ricard, Hardys, Lindeman’s, Australian Vintage, Jacob’s Creek, Pernod Ricard USA, Double Barrel, Barossa Valley Shiraz, Coonawarra Cabernet Sauvignon, Jacob’s Creek Reserve, Ben Bryant, Kenwood, Brindco, FSSAI, Treasury Wine Estates, Penfolds |