Diageo Sees Profits Dip But Continue to Focus on Innovation

logo diageo1

Diageo full-year results have shown an 8.5% decline in sales for the full year ended 30th June, from £15.3bn to £13.98bn. Pre-tax profit dropped from £3bn last year to £2.7bn, as the company suffered from weak trading in emerging markets combined with the strength of the pound against a number of currencies.

However Andrew Cowan, Country Director of Diageo Great Britain was keen to focus on the company’s good performance in the UK. He said, “Diageo Great Britain (GB) continued its return to growth with net sales growing by 2%, as we continued to successfully execute our strategy of driving innovation, growing the reserve portfolio, and focusing on profitable growth for our premium core business.  Diageo GB saw share growth in both the total beverage alcohol market and the spirits market.

“ Baileys delivered a strong performance with top line growth of 8%.  The launch of Baileys Chocolat Luxe marked an innovation highlight and the product was one of the top five spirits sold on Amazon over the week of Christmas.
“Further innovation successes in GB include Smirnoff Gold, our premix portfolio and frozen pouches. In total, nearly 70% of all spirits innovations in GB from the last twelve months  have come from Diageo Great Britain [Nielsen off trade, 12 months to March 2014].The successful launch of Smirnoff Gold and its signature serve, Apple Bite Gold, was launched in Great Britain adding 20 bpts to total Smirnoff value share and making it the brand’s biggest trademark extension. With real, edible 23 carat gold suspended in every bottle, it is a unique proposition that is completely new to the category.
“Ready to drink saw double digit growth, led by the success of our premix portfolio, providing popular brands, such as  Gordon’s and Pimm’s in more convenient formats.
“The reserve portfolio performed strongly, up 29%; once again driven by Talisker and by the luxury vodka brand Cîroc, which more than doubled in size and is the fastest growing super premium vodka in the UK.  Flavoured vodkas are helping to drive this trend and last year’s launch of Ciroc Red Berry and Ciroc Coconut was followed this year by the launch of Ciroc Peach.
“Smirnoff net sales declined but the brand saw gains in both volume and value share, supported by the ‘Great Drinks Made Easy with Smirnoff’ campaign.  The Johnnie Walker range grew across GB, helped by the launch of the ‘Johnnie and Ginger’ serve.  Captain Morgan continued to perform well in GB, growing 13%[1] and is now 52% of the Golden Rum category in the on-trade [CGA on trade volume, MAT to June 2014].
“In a challenging beer market, we consolidated the Made of More strategy for Guinness and continued our focus on a quality accreditation scheme aiming to improve and highlight the quality of Guinness in the on-trade.”

Category: News
Tags: Diageo