In recent years, liquor giants such as Pernod Ricard, Diageo, and Moet Hennessy have successively launched comprehensive transformation plans, involving restructuring, strategic optimization, asset divestment, and personnel streamlining across multiple dimensions. The scale and scope of these adjustments are unprecedented in nearly a decade.
The "elephant's turn" sets off a chain reaction, with every company's strategic choices reflecting its in-depth judgment on the industry's direction. When multiple leading companies almost simultaneously initiate transformation, it is no longer an isolated case, but rather a sign of the entire industry's profound adjustment.
Two Key Words for Transformation: Focus and Streamlining
After examining the transformation strategies of three companies, liquor merchants found that although the paths taken were different, they all pointed in two directions: reorganizing business segments and concentrating resources on businesses with higher certainty, and improving operational efficiency by streamlining and optimizing non-core businesses.
Bayer is taking the lead in transformation, with its "Fit for Future" efficiency enhancement plan as the main focus, aiming to achieve 1 billion euros in cost savings and efficiency gains by fiscal year 2029.
Key moves under the plan include splitting its brands into two main divisions, Gold and Crystal, by mid-2025. The Gold division will encompass aged spirits and high-end champagne brands such as Martell, Chivas, and Remy Martin, which have built strong channel foundations and brand premiumization capabilities in key markets over the years, forming the group's core profit base. The Crystal division will focus on Absolut Vodka, gin, and ready-to-drink products, targeting young consumers and the ready-to-drink scene. The two divisions will operate with clear boundaries and distinct business logic. Additionally, Pernod Ricard is also selling non-core assets, including Mumm Napa sparkling wine, Kenwood Vineyards, and Jacob's Creek.
It is understood that Martell will be more inclined towards mass-market and emerging price products, thereby continuously strengthening its advantage in the Cognac market. Additionally, Pernod Ricard's Chinese whiskey brand, baijiu Chuan, will focus on seizing the growth opportunities in catering consumption scenarios. Meanwhile, for new types of bars and smaller, more diverse consumption scenarios, it will expand its newly emerging white spirits portfolio.
Diageo's transformation is being led by new CEO Dave Lewis, who after taking office on January 1, 2026, launched a $1.2 billion "Acceleration Plan" aimed at saving $1 billion within three years.
Diageo's transformation focuses on enhancing the group's operational efficiency, which is more inclined towards optimizing its organizational structure. It has reorganized its global business into five major regions and 23 country clusters, with India, which has growth potential, being upgraded to an independent region from the Asia-Pacific region for the first time. This shows that Diageo is no longer adopting a centralized management approach, but instead is delegating decision-making power and shortening the response chain for each region to the market.
Among all the groups, Diageo has a more urgent need for efficiency improvements. Since Dave Lewis took office, not only have several senior executives left in a concentrated manner, but the company has also streamlined its personnel globally, as evident from its 2026 fiscal year report, which shows that Diageo's workforce has been reduced by nearly 2,000 people. A senior executive from a well-known baijiu company in Sichuan revealed that Wuliangye has recently increased its layoffs, and they have received many resumes from former Wuliangye employees.
Anheuser-Busch InBev's transformation plan is more focused on short-term growth difficulties. Since taking office in mid-2025, new CEO Frank Mariuz has abolished Anheuser-Busch InBev's original 10-year growth target and instead launched a more pragmatic three-year transformation plan "RC Forward", aiming to decouple Anheuser-Busch InBev's performance from economic fluctuations and increase its underlying operating profit by 100 million euros in the 2028-29 fiscal year.
In response, Alexandre Ricard proposed five major transformations: adjusting the organizational structure, rebalancing business resources, shaping brand expression, strengthening value-driven strategy, and reevaluating the investment model. In terms of specific operations, this includes launching innovative Cognac products, integrating luxury brands such as LOUIS XIII and Telmont, and starting from the Chinese market to release the growth potential of Hennessy XO.
The Strategic Logic Behind the Transformation
The root of this transformation lies in a common pain point: the "expansion-oriented architecture" built by foreign liquor giants during their growth period, which has become bloated and slow in a declining market.
Diageo's problems in the Chinese market are fairly representative.
In its early years, it acquired Wuliangye to enter the baijiu market, which was a symbolic move to expand its product categories, but Wuliangye has been dragging down the group in recent years: in the 2026 fiscal year, net sales in the Greater China region decreased by 34.9%, and baijiu sales plummeted by 41.9%. More noteworthy is the change at the channel end - in 2025, the number of Wuliangye distributors surged from 61 to 101, but the average revenue per distributor plummeted from 82.2 million yuan to 28.1 million yuan; due to the reduction in distributor income, 43 distributors were cut in the first quarter of 2026.
Diageo also took a similar path in its distribution system for imported spirits. "Previously, Diageo had over 100 secondary distributors nationwide, and without strong and effective institutional constraints at the group level, problems such as smuggling were likely to occur," revealed Lin Hua, a wine distributor from Fujian.
However, Diageo has been streamlining its distribution system, "since 2018, Johnnie Walker has adopted an exclusive distribution model, granting the national distribution rights to a major merchant in Guangdong," Lin Hua added.
Remy Cointreau attributes its growth woes to fluctuations in the economic environment, but an examination of its performance structure reveals a business highly concentrated on Cognac, with 80% of its Cognac performance dependent on the two major markets of China and the US. This level of concentration can amplify growth during favorable times, but once the market enters a downturn, the risks are exponentially magnified.
More than half of Remy Martin's revenue comes from the Asia-Pacific market, with a significant proportion from China. However, in recent years, Martell and Hennessy have taken up more than 80% of the market share, and are continuing to erode the share of Remy Martin and other Cognac brands in a market that is becoming increasingly competitive. The predicament of Remy Martin is gradually becoming apparent, such as the frequent delays in rebates to distributors in recent years, and the large-scale layoffs of sales staff in the northern market.
Pernod Ricard's diversified product structure also faces differentiation issues, with Absolut and Chivas achieving double-digit growth, while some high-end spirits saw double-digit declines.
Pain and Possibility in Transition
After the three major foreign liquor companies launched their transformation plans, they have all released their latest financial reports.
Diageo's fiscal year 2026 (July 2025 - June 2026) report showed global organic net sales of $19.643 billion, down 2% year-over-year; operating profit was $3.156 billion, down 27.2% year-over-year. Despite Ivan Menezes' successor, Dave Lewis, taking over operations for the second half of the fiscal year and implementing various measures including business restructuring and personnel streamlining, the company was unable to reverse the decline in full-year profits.
Pernod Ricard's organic sales revenue for fiscal year 2026 (April 2025 - March 2026) was €935.3 million, up 0.2% year-over-year, finally halting the 20% decline of the previous two years, but operating profit still saw a double-digit decline. The financial report showed that while Pernod Ricard's sales volume increased in the Chinese market, sales revenue declined; in particular, in the fourth quarter, Pernod Ricard's CLUB brand achieved double-digit sales growth in China's e-commerce channels. Relevant personnel revealed that in the new fiscal year, it is expected that sales volume growth will continue to significantly outpace sales revenue growth, indicating that the company is trying to rescue its struggling Chinese market through a strategy of trading price for volume.
Bayer's organic net sales for fiscal year 2026 (July 2025 - June 2026) were 9.404 billion euros, down 14.2% year-over-year, while recurring operating profit fell 5.2% organically to 2.423 billion euros. However, after implementing its transformation plan, organic sales for the second half of the fiscal year showed significant improvement, with the decline narrowing from 5.9% to 1.3%.
The aforementioned performance is more reflective of the growing pains associated with transformation. It's not easy for a "large elephant" to change direction, especially when it needs to break free from the organizational inertia and path dependence formed during its previous period of rapid growth. However, the transformation strategies of these industry giants have also brought new possibilities to the sector.
After streamlining their business lines, major liquor giants will create more precise resource allocation logic for their flagship brands. For example, Pernod Ricard will concentrate on operating a few core brands such as Martell and Chivas Regal; Moet Hennessy has established an independent department for luxury brands like Louis XIII. Following this, advertising, channel development, and consumer cultivation can be more focused, and investment in core categories is also expected to increase. Meanwhile, trendy categories have the opportunity to expand and grow. Several companies will operate white spirits as an independent track, Pernod Ricard has specially created the SIP platform to serve the growth of bartenders, and Diageo has made similar investments.
The effects of this collective transformation will take several full fiscal years to fully emerge, but the signals are already apparent - the liquor industry is bidding farewell to an era of growth driven by widespread distribution and brand stacking, and "precision and specialization" will become the new direction.
*All interviewees' names have been changed to protect their identities