The English executive, who speaks very fluent Spanish thanks to the years he lived in Jerez de la Frontera, arrived in Mexico in September 2021 and immediately assumed the position of CEO with the aim of continuing the successful work of repositioning the brand started four years earlier by Enrique Murillo, from Seville, who returned to Spain with his family last year, after fulfilling the task of laying the foundations for the new administration.
Casa Pedro Domecq has sought to diversify its product offering through marketing alliances. Since 2017, it has distributed Emperor Group brands in Mexico and in April closed an agreement with the French group Rémy Cointreau to market several of its brands in Mexico, including Louis XIII, Rémy Martin, The Botanist and Cointreau, among others.
Major spirits companies are looking for merger and acquisition opportunities, or making alliances, to increase their offering of spirits premium, because sales of higher priced beverages are expected to grow more than moderately priced beverages in the next five years.
According to IWSR beverage market analysis, the volume of sales of spirits and premium wines, of 200 dollars or more -about 4,000 pesos- they will increase 25.6% annually between 2020 and 2025. By contrast, sales of the lowest-priced beverages at $10 a bottle are forecast to grow just 0.8% annually over the same period.
“The lockdown created a renewed interest in cocktails. People were encouraged to pay for experiences of this type at home: they sent you the kit and gave you the class via zoom. This allowed consumers to try drinks that they may never have had before such as whiskey, gin or brandy,” says Luis Gaitán, president and chief creative officer from Gray Mexico. The specialist believes that this is likely to motivate people to seek premium drinks when they return to bars, restaurants or hotels.
The return of customers to luxury restaurants and five-star hotels, due to vaccination-induced confidence, is also expected to boost demand for high-end beverages. In Mexico, hotel occupancy reached 63.6% of hotel occupancy, in the period of Holy Week and Easter 2022, this is 23.9 percentage points more compared to the same holiday period of 2021.
Casa Pedro Domecq is no stranger to this trend and for this reason has paid special attention to strengthening the offer of spirits premium –as the distillates are also known–, with the incorporation of brands of whiskey like The Dalmore, whose price reaches 7,700 pesos. The company has also added brands of Cognac Louis XIII, whose bottles exceed 300,000 pesos.
While Pedro Domecq continues to analyze opportunities to expand his offer of premium and super-premium beverages, he also sees in the crystal clear spirits, such as tequila, mezcal, and ginan area of opportunity.
The company closed a commercial alliance in 2018 with Casa Armando Guillermo Prieto to market the Señorío and Zignum mezcal brands. According to Kantar data, the category of maguey distillates, such as tequila and mezcal, is the second largest in Mexico, after beer. In the last year, spending on this type of beverage grew 8% in the country.
Skeleton, an old wolf of wines and grape distillates, knows about the variations in flavor that a drink can have after passing through the barrel. And that is precisely the differentiator that he has the new mexican gin that it has added to the portfolio, called Cantera Verde, which has a touch of smoky flavor after spending a few months in mezcal barrels. In addition to this gin, Casa Pedro Domecq has also strengthened its gin offering with some other imported gins such as The London, Mom and Puerto de Indias.
Today the company’s offer is wide: there are around 50 brands, including its own and marketing licenses with which it covers various price levels and categories, from core such as brandy and wine, to smaller but very dynamic ones, such as gin and mezcal, passing through niche ones such as cognac. Casa Pedro Domecq increased its sales by 16% in 2021 compared to 2022, according to company data, thanks to the repositioning of brandy brands, but also to the diversification of the product portfolio.
“We want to have an offer for different price bands. The Mexican market has consumers with great purchasing power, but also a very large base of customers who are looking for good products at affordable prices. We want to cover the spectrum, today we have from a Presidente brandy for 110 pesos to a Louis XIII cognac. If we can serve various categories and price bands, we can grow,” says Skelton.