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Johnnie Walker, Cîroc Lead 6% Diageo Sales Increase In U.S.

August 23, 2012

Volumes rose by just 1% in Diageo’s U.S. business in the 12 months through June, but a surge into higher pricing tiers—led by Johnnie Walker and Cîroc—helped the drinks giant post 6% net sales growth in both the U.S. and its North America region for its full fiscal year.

Cîroc’s North American volume and value were up 58% and 61% organically over the past year, boosted by Cîroc Peach, which Diageo calls its “most successful North American product launch to date.” Johnnie Walker, meanwhile, saw volume climb 9% and organic net sales rise 18% on the back of a 24% increase in Diageo NA’s Scotch marketing spend. That effort, including the brand’s “Say it without saying it” campaign, helped move consumers toward more premium expressions within the Johnnie Walker line. Smirnoff (volume up 3%), Buchanan’s (+9%), Ketel One (+8%), Captain Morgan (+5%), Baileys (+3%) and Guinness (+9%) also contributed positive North American growth, while Crown Royal (-4%), Jose Cuervo (-6%) and Tanqueray (-2%) slipped.

Diageo NA’s wine volume fell 5% during the year. The company said the restructuring of its Chateau & Estate unit is now complete, but that the wine category, amid intense pricing pressure, remains challenging. The company recently named Claudia Schubert as the wine unit’s president, replacing Greg Kryder, who was promoted to chief financial officer at Diageo NA.

Across its global business, Diageo posted a 2% organic volume gain, while net sales rose 6% to £10.8 billion ($17.1b) and operating profit inclined 22% to £3.2 billion ($5.1b). Africa (volume up 5%) and Latin America & Caribbean (+10%) were its fastest-growing regions, with Europe down 1% and Asia Pacific up 2%, as double-digit growth in Southeast Asia, China and India was offset by slower sales in Korea and Australia.

 

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