Diageo enjoys strong UK sales growth

Diageo has reported that it grew market share in the UK off-trade and on-trade in the past year, largely thanks to the strength of Baileys, Guinness and Gordon’s.

On a global basis, in the year to June 30, Diageo grew sales to £12.1 biilion, while operating profit grew by 25% to £3.6 billion.

Share prices grew on the back of the strong results and the UK helped drive them.

The Diageo Reserve arm, which contains premium spirits like Tanqueray, Ciroc, Bulleit, Lagavulin and Talisker, enjoyed “double-digit growth” in the UK.

Total beer volumes were up 3.4% on the back of several recent launches under the Guinness brand, from porters to a lager and golden ale.

Smirnoff ciders were also on form, as were brands like Captain Morgan.

Over to Charles Ireland, general manager at Diageo Great Britain, Ireland and France, to take it away.

“This year has seen our GB business grow market share in both the on and off-trade,” he said. “We have focused on three areas - building the performance of our core brands – like Baileys, Guinness and Gordon’s, growing our reserve business which continues to enjoy double digit growth and through our on-going work to innovate on new and existing brands to provide UK consumers with new propositions to match their evolving tastes.

“Within our premium core brands we have seen another year of solid performance. Guinness saw another successful year with our total beer volumes growing 3.4%. We have grown market share and the Guinness Trademark has proved its credentials in craft, heritage and quality – with sales up 5.8% driven by the continued success of Hop House 13.

“Baileys had a strong Christmas and was well supported in the on and off trade throughout the year. Flat white martinis were a major sales driver – with tens of thousands of sales in the on-trade. Tactical marketing and sponsorship with the Bailey’s Women’s Prize for Fiction and Made in Chelsea also expanded reach.

“Smirnoff remains the biggest vodka in GB and grew share in a falling category. The brand continues to build on its long-standing commitment to diversity and inclusion through projects with electronic dance music and at Pride in London.

“Gordon’s has had a great year, as the gin category continues to fly. It is up double digits in both value and volume terms. With a refreshed bottle design and desire to cut through clutter and triviality helping it to outperform its peers.

“Captain Morgan remains the fastest recruiting spirits brand in Great Britain [Millward Brown], growing share in the on and off trade. Work on the ‘Captain, Captain?’ campaign with the likes of Wes Morgan and Eoin Morgan has contributed to this success, along with the premix variants like Captain & Cola and White mojito increasing premix can sales by 44%.”

He added: “In Reserve, growth was driven by a number of our brands including Ciroc which built on its lead as the biggest luxury vodka in GB, and is now 18% ahead of its nearest competitor. Ketel One nearly doubled volume, while Tanqueray Ten is up 78% showing continued momentum in the on and off trade.

“Bulleit, our premium US whiskey grew 50%. Our single malts also saw increased success – with the pull of the unique flavours and histories behind brands like Dalwhinnie, Talisker and Lagavulin. This year saw our inaugural International Scotch Day, The Talisker ‘Made by the Sea’ campaign, the launch of Haig Clubman, Lagavulin 25 and 8 year olds.

“Turning to innovation, Hop House 13 has had a good second year in the market and continues to broaden appeal for a lighter, accessible liquid building on Guinness’s vibrant trademark. It shows the strength of our Open Gate Brewery initiative to explore the opportunities we have in our brewing skills.

“In cider, a significant growth category in the UK, Smirnoff’s ciders did particularly well. Beating expectations in year two, proving that there continues to be demand for new and exciting choices for consumers in this popular category. Haig Club’s Clubman launched in the past year has been well received and is helping to rejuvenate the Scotch category in Britain, bringing a new younger cohort to Scotch.

“The millennial consumer has no predetermined view on how to drink Scotch and Clubman has provided options – whether it is with a slice of lime and coke, on the rocks or neat. Other significant innovations in the year included a range of flavour extensions and new products.

“At the reserve end with Ciroc Summer Colada, the top-selling vodka on Amazon.co.uk since launch, and Tanqueray Malacca, a sweeter more citrus focused gin. In our premium core we saw the success of Bailey’s Pumpkin Spice and the new Iced Coffee in a can coming in Mocha and Latte variants.”

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