Pernod Ricard saw a sharp decline in its sales in its China and US markets, with it now expecting to meet the lower end of its long-term sales target by 2029, according to reports on Thursday.
The firm pegged its anticipated sales growth to bottom half of its 3%-6% target through 2029, Reuters reported.
ALSO READ: Varun Beverages Begins First Step To Enter Alcoholic Beverages. But Why Is The Stock Falling?
According to market research by IWSR, alcohol consumption around the world is expected to decline, with major spirits retailers and manufacturers already witnessing a downturn in sales over the past three years. Stock market valuations have also reduced in that time.
As per the study's 10-year forecast, the volumes for consumption of alcoholic beverages is set to fall until 2031. By 2035, sales volumes are expected be 1% lower than the preceding year despite a 9% jump in the global number of drinkers above or at the legal age.
Shares of the French wine producer and retailer declined by 6%, with the Chief Executive Officer (CEO) Alexandre Ricard informing investors that the US, which is its largest market, offers meagre potential for growth for upcoming three years, affecting its aggregate group performance.
US sales had fallen 14%, while China sales had reduced by 19% in the year ended June 30.
Ricard told Reuters that the firm's wide geographic presence should aid in its performance in the years to come.
Factors affecting this shift in consumer preferences included an increase in the cost of living, as well as a shift in habits, along with an increase in health conscious sentiment, and the prevalence of weight loss drugs.
ALSO READ: Alcohol Next: Varun Beverages Set To Diversify, Taps Ex-Diageo Executive For New Arm
Ricard further stated that the company will be concluding its restructuring programme worth $1.2 billion, one year before schedule, having laid off 3,600 job roles in fiscal 2024.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.