Transformation Realized: How a global beverage company adopted a cross-functional digital strategy to create long-term value

The company can accurately predict demand and its employees can perform value-add functions.

Pernod Ricard, a global alcoholic beverages company, has undergone an extensive digital transformation and has seen its accuracy in demand prediction improve by 25%. 

Pernod Ricard foresees a growing market in India. The country’s demographic growth means a large number of potential new consumers of legal drinking age. The addressable market is also expanding as incomes grow and consumers expand their repertoire from whiskey-only to gins, vodkas, wines, and more, explained Simon de Beauregard, Pernod Ricard’s Chief Transformation Officer, and member of its Management Committee. “Pernod Ricard has been doing well. But as Jack Welch said, change before you have to.”

EY worked with Pernod Ricard to build a digital strategy that would lead to operational excellence and long-term efficacy. The designed strategy revolved around four ‘essentials’ and four ‘accelerators’. The essentials were: operational excellence, sustainability and responsibility, talent development, and route to market. The four accelerators were, firstly, their portfolio — they take pride in having one of the most comprehensive portfolios in the industry. The second accelerator is innovation and using innovation to fill in gaps in products, experience, or service. Third is addressing the prestige and luxury aspect of alcoholic beverages, especially considering the increase in the number of HNIs. The fourth and the most important was digital acceleration. “As a group, globally and in India, we are pushing digitally,” said de Beauregard.

Therefore, the overarching goal of digital transformation was to reconfigure Pernod Ricard’s talent and processes in such a way that automation allows employees to perform value-add functions instead of data crunching, and that the processes lead to more accurate demand prediction and fulfillment.

Identifying and overcoming challenges

The digital transformation strategy faced external and internal challenges.

Being in the alcohol industry in India is tricky. It is extremely volatile as it is affected by various market conditions, explained Anupam Bhatnagar, Partner, Technology Consulting, EY India. Companies must comply with very specific regulations, which change across states. The route to market is not static as it changes with the change in policy. As a result, the organization and its entire supply chain have to be ready to respond to any change. Moreover, manufacturing and distribution are expensive, forming the core costs for an alcohol company.

As the business transformation cut across the organization in 28 markets in the country, an added challenge was understanding market exceptions and defining a process that would be uniform. 

EY designed a multi-pronged business transformation approach. One part of the approach was analyzing KPIs, data, and processes to determine their function today versus what it needs to be in the future. The scope of the transformation was large, touching all functions across the organization. 

However, for the transformation to work, the organization’s employees had to be in line with the goals. To achieve this, the company identified process champions. A governance framework was built to track and monitor processes. More than 250 employees were upskilled so that the change proves effective for the long term.

The cornerstones of the digital strategy were data, people, and technology, but the approach was to go step by step and team by team. It started with transformation in the finance function. The planning process was transformed with encouraging results. Automation led to high levels of adoption and efficacy, saving 500 man-days of planning processes. The supply chain operations underwent an end-to-end transformation, from demand planning to logistics planning. 

The staggered approach of rolling out solutions and working back with the stakeholders helped bring in changes that were pragmatic and would have a long-term impact.