Pernod-Ricard acquires online retail giant The Whiskey Exchange
The French beverage conglomerate Pernod-Ricard has just announced the acquisition of Specialty Drinks Ltd., the parent company of The Whiskey Exchange. TWE is one of the largest online spirits retailers in the UK and the largest online whiskey retailer in the world.
In addition to TWE, the Specialty Drinks acquisition will also include The Whiskey Exchange’s three outlets in London: TWE retail events, Whiskey.Auction and ABV Global. According to the company:
The sale will not include Elixir Distillers and the future distillery which recently became a separate entity, Elixir Distillers Ltd. It also does not include Specialty Brands which has always been a separate company.
Specialty Drinks was established in 1999 by Sukhinder and Rajbir Singh. The company sells around 10,000 drinks. He has always been recognized by the spirits industry as a leading innovator. Specialty Drinks won Online Retailer of the Year at the Drinks Business Awards in 2018 and 2020, and Independent Business of the Year in 2012.
The company also won, among others, the Decanter Retail Award 2019 for Best Retail Champagne and Sparkling Specialist and the IWSC Trophy in 2017 as Independent Spirits Retailer of the Year.
Announcing the sale, company co-founder Sukhinder Singh said:
Since we launched The Whiskey Exchange 22 years ago, we have had great success in delivering quality whiskey and spirits to people around the world, not only through our retail business, but also through our subsequent activities that emerged. The last few years in particular have brought about a period of rapid growth which has highlighted the need for us to strengthen our experience, resources and infrastructure to deliver the next stage of business and strong demand for the development of premiumization, and we are delighted to have entered into this agreement with Pernod Ricard to achieve this. My brother Rajbir and I look forward to staying at the helm of the company and contributing to the future growth of the global beverage industry.
This acquisition is the latest in Pernod-Ricard’s “consumer-centric strategy” aimed at meeting new consumer needs and expectations in a context of strong growth in electronic commerce. Pernod-Ricard also operates its own internal e-commerce platforms, including: Drinks & Co. and Bodeboca.
According to Alexandre Ricard, Chairman and CEO of Pernod Ricard:
E-commerce is a key channel in our long-term strategy. We are excited to be working with industry pioneers such as Sukhinder, Rajbir and the whole team to bring The Whiskey Exchange to a new stage in its development..
In recent years, Pernod-Ricard has focused its acquisitions on a series of niche players intended to expand its capacities and the range of premium spirits it can offer. This is especially true in the United States, where it has made a series of acquisitions, primarily focused on the craft whiskey industry.
These acquisitions include Castle Brands, 2019 (Jefferson’s, Gosling); Rabbit Hole, 2019; Smooth Ambler, 2017 and Firestone & Robertson Distilling Co., 2019, (TX). Other recent European acquisitions include La Hechicera, 2021; CEDER, 2021 and Vermú St. Petroni, 2020.
This strategy of focusing on small premium niche producers is the opposite of Pernod-Ricard’s previous acquisition strategy which saw it focus on building market share through the acquisition of major brands. and companies in the spirits industry.
Between 2000 and 2010, Pernod-Ricard acquired around 40% of the assets of beverage giant Seagram, 2001, Allied-Domecq, another beverage conglomerate in 2005, and Vin & Sprit (Absolut Vodka) in 2008. The acquisitions, for at a cost of more than $ 25 billion, catapulted it to the world’s second-largest beverage company, just behind Diageo.
By all indications, this shift from building market share and scale to targeting value-creating niche acquisitions will continue. The acquisition of Specialty Drinks is just the latest example.