Pernod Ricard puts its money on American whiskey

Pernod Ricard has bought a majority stake in the Rabbit Hole bourbon brand as it seeks to capitalise on the American whiskey boom.

According to the Distilled Spirits Council, American whisky volumes were up 5.9% to 24.5 million cases (+1.4 million cases) in 2018, with revenues up 6.6% to $3.6 billion (+$224 million).

Pernod Ricard's purchase of Rabbit Hole follows the company's acquisition of Smooth Ambler West Virginian whiskey in 2017, which signalled its re-entry into the category after selling the Wild Turkey brand in 2009.

Rabbit Hole, an award-winning range of Kentucky spirits, is particularly recognized for its iconic, state-of-the-art distillery in the heart of Louisville. The brand’s Straight Bourbon and Rye whiskeys are crafted with a mix of carefully selected grains, distilled in copper Vendome column stills and aged in native oak barrels by Louisville’s hot summers and cold winters.

Pernod Ricard noted: "The Bourbon category is currently undergoing a renaissance; new consumers are discovering its quality and versatility as Bourbon can be appreciated neat and has also recently earned its rightful place in modern mixology."

As part of the deal, Pernod Ricard is joining forces with Rabbit Hole's entrepreneur owner moving forward, Kaveh Zamanian. Kaveh is keeping the majority of his shares in Rabbit Hole and will continue to operate the company.

Alexandre Ricard, CEO of Pernod Ricard, said: “This partnership is the perfect implementation of our long-term investment strategy to create sustainable value. Kaveh and I embrace the same entrepreneurial spirit. Rabbit Hole is a fast-growing brand, strongly rooted in its terroir and very well positioned in the high-end Bourbon and Kentucky whiskey categories. We are excited to take the brand to the next stage of its very promising development.”

Zamanian added: “Pernod Ricard and I share the same entrepreneurial values and our ethos and strategic visions are fully aligned. By leveraging Pernod Ricard’s extensive distribution network to reach new consumers, we are able to strengthen Rabbit Hole’s position as a brand and amplify its presence as a new voice in American Whiskey. In partnership with Pernod Ricard, Rabbit Hole is poised to reach new heights. I am very excited about this partnership and our future together.”

Rabbit Hole is available in 18 US states, and its monthly bottle sales have doubled over the past year. The brand is on track to sell 15,000 cases of 12 bottles by the end of 2019.