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Expected to Be a New Weapon to Revive the Stagnant Domestic Whiskey Market

Pernod Ricard Korea is launching a Scotch blended whisky brand with a dystopian concept that differentiates itself from the mostly classic image of existing Scotch whiskies. The strategy aims to revive the somewhat sluggish domestic whisky market through a new product made by blending raw spirits from two regions with different characteristics.

Pernod Ricard 'The Deacon'

Blending Peat and Sweetness... Next-Generation Scotch Whisky ‘The Deacon’

On the 15th, Pernod Ricard Korea held a press conference in Gangnam-gu, Seoul, announcing the official domestic launch of the blended Scotch whisky ‘The Deacon’ in collaboration with the global wine and spirits company Sovereign Brands.

The Deacon is a product made by blending whiskies selected from Scotland’s Islay and Speyside regions. Whisky produced in the Islay region boasts a smoky flavor because peat is used as fuel during the malting process (malting is soaking barley in water to germinate and then drying it immediately). In contrast, whisky from the Speyside region has a strong fruity aroma and a smooth sweetness. The Deacon combines the strengths of whiskies from these two regions to harmonize the contrasting flavors of smokiness and sweetness.

Brett Berish, CEO of Sovereign Brands, is explaining the product at the press conference commemorating the launch of 'The Deacon' held on the 15th in Sinsa-dong, Gangnam-gu, Seoul.

Pernod Ricard developed this new brand together with Sovereign Brands, a company known for its unique and stylish branding with a portfolio that includes ‘Luc Belaire’ and ‘Bumbu Rum’. Pernod Ricard explained that while maintaining the high quality of Scotch whisky, they added the rough yet sophisticated style of Sovereign Brands to create The Deacon, which breaks away from the traditional Scotch whisky framework. Pernod Ricard plans to position The Deacon as the next-generation whisky targeting mainly consumers in their 20s and 30s.

To commemorate the domestic launch, Brett Berish, CEO of Sovereign Brands, who visited Korea, emphasized that “a truly great brand starts with blending,” highlighting that this product aims for a blend unlike any before. He described The Deacon as “a product that embodies our innovative style, luxurious, original, complex yet balanced, allowing for a smooth enjoyment.”

Pernod Ricard 'The Deacon'

"Leading the Alcohol Market Trend with a New Brand"

The launch of The Deacon by Pernod Ricard Korea is interpreted as a strategy to respond more proactively to the fast-changing domestic alcohol market. Instead of responding to trends by expanding or upgrading existing brand lineups, they judged that it is more effective to lead the market by proactively planning and introducing product lines with previously absent concepts.

On the day, Franz Horton, CEO of Pernod Ricard Korea, said, “The domestic whisky category has shown a slight slowdown in recent months, and consumers have started looking for new products,” adding, “We believed that products like The Deacon, which break existing conventions and norms, could become a new option following single malts and non-Scotch whiskies.” He also noted, “The decision to partner with Sovereign Brands, which has introduced products that break existing conventions and norms, was based on this background.”

Frantz Hotton, CEO of Pernod Ricard Korea, is explaining the product at the press conference commemorating the launch of 'The Deacon' held on the 15th in Sinsa-dong, Gangnam-gu, Seoul.

The domestic whisky market, which experienced rapid growth during the COVID-19 pandemic, has shown some stagnation this year. According to customs import-export trade statistics, as of the third quarter of this year, the import value of whisky in Korea was $179.23 million (approximately 244 billion KRW), down 11.7% from $202.95 million during the same period last year. The import volume also decreased by 21.0% to 19,529 tons from 24,734 tons last year. This marks a halt to the rapid growth trend where import value nearly doubled over three years from 2020 to last year.

As the market stagnates, Pernod Ricard Korea’s performance has followed a similar trend. According to the Financial Supervisory Service’s electronic disclosure system (DART), Pernod Ricard Korea, which closes its fiscal year in June, recorded sales of 175.16 billion KRW for the 2023 fiscal year (July 2023 to June 2024), a 5.4% decrease from 185.26 billion KRW the previous year. Although they responded by improving cost efficiency, such as reducing selling and administrative expenses, and increased net profit to 40.9 billion KRW, up 21.7% from 33.6 billion KRW a year earlier, this is not a fundamental solution.

Recently, Pernod Ricard Korea has responded relatively agilely to changes in the domestic alcohol market, where trend cycles are short. They expanded their main portfolio, which was centered on blended whiskies like ‘Ballantine’s’ and ‘Royal Salute’, to include single malt whiskies such as ‘Glenlivet’ and ‘Aberlour’ during the COVID-19 single malt whisky boom. Since last year, they have gradually adjusted their main marketing brands to include non-Scotch whiskies like Ireland’s ‘Jameson’ and ‘Redbreast’ and the US ‘Jefferson’ bourbon. Now, they are aiming to expand their consumer base through the launch of a new brand with a novel concept.

Meanwhile, Pernod Ricard Korea maintains a positive outlook on the domestic whisky market. They view the recent stagnation as a normalizing adjustment process following the rapid growth during the COVID-19 period rather than a downward trend. Horton emphasized that the post-COVID-19 adjustment is a global phenomenon, including Korea. He explained, “During COVID-19, alcohol consumption increased as other consumption areas were limited, but now it is decreasing as consumption disperses to activities like travel,” describing it as a normalization of the super cycle. However, he added, “Since Korea’s whisky market grew much more than other countries, the recent adjustment feels more abrupt,” and predicted, “The market will continue long-term growth through this adjustment process.”