Pernod Ricard leans on AI as African sales surge

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While much of the global alcohol industry grapples with slowing demand, Pernod Ricard is finding growth in Africa.The French premium spirits group says Africa and the Middle East delivered double-digit growth in 2025, making it one of the company’s fastest-growing regions, even as consumers in many developed markets cut back on spending.The performance is prompting Pernod Ricard to deepen investment in South Africa, where it is increasingly relying on AI and predictive analytics to understand consumer behaviour, refine marketing campaigns and position its premium brands for a younger generation of drinkers.Pernod Ricard Africa MD Sola Oke said Africa’s demographics continue to distinguish the region from mature markets facing ageing populations and weaker demand. “Africa and the Middle East have been one of the biggest growing regions for Pernod Ricard, growing double digits. That momentum hasn’t stopped.”He said the company continued to navigate inflation, higher excise duties and geopolitical uncertainty, including tariffs and supply-chain disruptions, but believes Africa’s long-term fundamentals remain intact. “Africa has the youngest population in the world. That is where the opportunity lies.”Africa and the Middle East have been one of the biggest growing regions for Pernod Ricard, growing double digits. That momentum hasn’t stopped.Pernod Ricard is focusing on understanding why, where and how consumers are drinking.The company has rolled out several AI-powered platforms across its African business that analyse where consumers drink — whether in restaurants, bars or other social settings — and identify the occasions and experiences influencing purchasing decisions.It also has another platform that determines where marketing budgets will have the greatest impact, analysing the effectiveness of television, billboards, digital advertising and other media channels.Its sales use AI tools to optimise promotions and pricing at retail outlets, while a generative AI platform enables marketers to produce campaign concepts and digital content in hours instead of months. “In any business that wants to grow, you first have to understand the consumer,” Oke said. “If you understand where consumers are, where they want to go and how they experience brands, then you can adapt your products to what they are looking for.”The investment reflects a broader shift in drinking habits.Consumers are no longer drinking in the same way they did a decade ago, Oke said. Younger consumers are moving away from traditional nightlife towards restaurants, entertainment and curated experiences, forcing premium drinks companies to rethink how they engage with customers. “Consumers are not drinking less. They’re changing how and where they drink.”The trend has reinforced premiumisation, with consumers opting to buy fewer but higher-quality drinks. “Consumers may not buy premium products every week, but when they do they want quality, authenticity and heritage.”South Africa remains one of Pernod Ricard’s most important markets on the continent. Jameson continues to be the company’s flagship brand locally and across Africa, while Martell cognac, Glenlivet single malt whisky, Ballantine’s Scotch whisky and Chivas Regal are still among its strongest performers.Oke said Pernod Ricard benefits from one of the broadest premium spirits portfolios globally, allowing it to compete across whisky, cognac, gin, tequila and champagne markets.Premium whisky is one of the most fiercely contested categories in South Africa, alongside cognac and single malts, while tequila is emerging as one of the fastest-growing spirits categories globally as consumers seek new drinking occasions.Oke believes tequila is one category to watch over the coming years as younger consumers increasingly embrace the spirit, mirroring trends already evident in the US and other developed markets. “Tequila is becoming quite competitive globally. In a market like the US there has been a real shift towards tequila. You see celebrities buying into tequila brands and building those brands.” The trend is beginning to filter through to African markets, where tequila is gaining traction among younger consumers. Although the broader gin category has cooled after years of explosive growth, Pernod Ricard’s South African luxury gin, Inverroche, continues to outperform the market, said Oke. Pernod Ricard, which bought Inverrroche in February last year, is expanding the brand beyond the South African market, positioning the Stilbaai-produced brand as Africa’s premium gin.Oke said Inverroche was steadily gaining market share locally and growing in other parts of Africa. “It’s a proudly South African brand that we want to scale across Africa and then the rest of the world.”The operating environment nevertheless remains challenging. Annual excise duty increases continue to place pressure on both producers and consumers, while inflation and the rising cost of living have squeezed discretionary spending.The illicit alcohol trade has also emerged as one of the industry’s biggest threats. According to the Drinks Federation of South Africa, counterfeit and illicit alcohol now account for an estimated 18% of the local market, depriving the government of tax revenue while exposing consumers to potentially unsafe products.Oke said Pernod Ricard and its competitors were working together through the federation, partnering with retailers, the South African Revenue Service and law enforcement agencies to identify outlets selling counterfeit alcohol and support enforcement operations. “It’s revenue that the government is not getting, and, as an industry, it’s a big concern,” he said.The company has also invested in product authentication technology, allowing bottles to be traced through the supply chain and tested if counterfeit products are suspected.Despite cost pressures and regulatory headwinds, Pernod Ricard is optimistic about Africa’s long-term prospects. For Oke, success will depend not only on having iconic brands but also on understanding consumers better than competitors.“The consumer is changing. The businesses that understand those changes the fastest will be the ones that continue to grow.”Business Times