DEO - Pernod Ricard: Long-Term Emerging Market Compounder
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Introduction
The spirits industry has enjoyed strong structural growth in recent years, driven by rising consumption in emerging markets, and drinkers globally moving to more premium products. Spirits are gaining share against other forms of alcohol, both globally and in advanced economies like the U.S., with the value of the premium and super/ultra-premium spirits growing at mid-to-high single digits annually, as shown in the charts below:
We believe large multi-brand, multi-category players like Diageo (DEO) and