Pernod Ricard, Wal-Mart bring Malibu Rum production line to Fort Smith

The Fort Smith distillery for France-based Pernod Ricard has assumed bottling of the company’s popular Malibu Rum label, Gov. Asa Hutchinson and executives from Pernod Ricard USA and Wal-Mart Stores announced Monday (Oct. 10).

While no new jobs are part of the deal, which has Wal-Mart buying the rum as part of the retailer’s broader effort to bring manufacturing jobs back to the U.S., company officials said the investment in the plant and new line will add production hours for existing workings and could boost seasonal employment.

Speaking from the Fort Smith facility’s production floor, Gov. Hutchinson congratulated both in-state companies, noting it “represents the type of creative collaboration that will further boost the economy.”

Cindi Marsiglio, vice president of U.S. Manufacturing for Bentonville-based Wal-Mart Stores, commended Pernod Ricard for its “significant capital investment” in moving operations for the label to be sold to Wal-Mart as part of the retailer’s $250 billion initiative for supporting American jobs.

“Wal-Mart’s commitment to buy an additional $250 billion in products supporting American jobs is having a tangible impact on communities across America. In the four years since we launched our initiative, we’ve seen factories opened, jobs created and American products added to our shelves in store and online,” Marsiglio said.

Marsiglio told Talk Business & Politics after the event that Wal-Mart’s effort, which began in 2013, is on pace with expectations.

“I am thrilled with the progress. We are on track to meet our receipt goals,” adding, “the way I track it is by what we’re buying, and we’re estimating that job creation is on track as well. So I know what we’re buying, which is right on our path to the 10th year. We’re almost four years in, and we’re seeing good progress across the right categories, including adult beverage.”

Wal-Mart hopes to create 1 million jobs nationwide by 2023 as part of the effort, and Marsiglio is confident this will be a positive impact for Arkansas as well.

“I have been in factories around Arkansas since we’ve begun this initiative, and I’ve seen areas for growth and opportunity – job by job, factory by factory. Here today (with the Malibu Rum relocation) we have 6,000 shift hours, which translates into more shift hours (for existing employees) and seasonal into full-time employment. Now it will depend on how the product performs, but I think customers are going to respond really well, and the more we can tell them that the products they’re buying are coming from the U.S., the better,” Marsiglio said.

One big way job creation will happen, she added, is through related suppliers.

“We have found our direct suppliers are part of the story,” Marsiglio explained. “I hear all the time from suppliers that as you go up their supply chain — the glass bottling, the packaging — that they are able to source up their supply chains more regionally and locally. So I think that million-job number you hear us talk about, those are the types of jobs included in the impact.”

In the Pernod Ricard announcement, she said, many of those ancillary jobs are “going to be near this plant.”

An example of this cited by Melissa Hanesworth, managing director for Pernod Ricard’s Fort Smith plant, is International Paper, which makes the Malibu Rum packaging that was prominently on display at Monday’s event.

Hanesworth confirmed with Talk Business & Politics what Marsiglio said – the immediate jobs impact for Pernod Ricard will be 6,000 man-hours “incremental” for existing employees.

“I see that as the initial, and it will continue to grow, which does mean new jobs,” Hanesworth said, adding that the company invested “tens of thousands of dollars” in equipment to produce the initial run of 150,000 Malibu Rum cases per year, and its an investment that will help to support about “five to 10 suppliers.”

Any new manufacturing jobs will be welcome in the Fort Smith metro area. The U.S. Bureau of Labor Statistics estimates metro manufacturing employment at 17,900 in August, unchanged compared to July and better than the 17,700 in August 2015. However, sector employment is down 6.7% from just five years ago when August 2011 employment was 19,200, and is well off peak employment of 31,000 set in August 1999.

The Pernod Ricard/Hiram Walker facility in Fort Smith produces 5 million cases of spirits annually with other labels including Kahlua Liqueur, Seagram’s Gin, and the recently introduced Smithworks Vodka.