Diageo Sees North America Sales Dip 3% Amid “Cautious Consumer Environment”
July 30, 2024Diageo has revealed North American net sales down 3% to $7.9 billion for its fiscal year ended in June, with operating profit dipping 2% to $3 billion. Diageo CEO Debra Crew said the North America decline was “attributable to a cautious consumer environment and the impact of lapping inventory replenishment in the prior year.” Across its global business, Diageo saw sales decrease 0.6% on an organic basis to $20.3 billion for the year, as operating profit fell 5% to $6 billion.
Diageo’s core U.S. spirits business was down 3% in the fiscal year on a volume decline of 5%, with depletions running about one point ahead of shipments. On the plus side, Diageo’s spirits-based RTD segment grew 15% on the launch of its Cocktail Collection featuring a Ketel One Espresso Martini, Ketel One Cosmopolitan, Astral Margarita, and Tanqueray Negroni, and Buchanan’s Scotch whisky rose 3%, boosted by its Pineapple flavor.
In American whiskey, Bulleit’s sales jumped 12%, although shipments were “significantly ahead of depletions growth as inventory levels continue to normalize.” Diageo Beer Co. USA was another bright spot, with sales growing 3% on strong growth for Guinness, Smirnoff flavored malt beverages, and the launch of Captain Morgan Sliced FMBs.
Total Tequila sales fell 5% despite 12% sales growth and 21% depletions growth for Don Julio, as Casamigos sales decreased 22%, with depletions off 9%. Crown Royal net sales declined 1%, due to Crown Royal Deluxe and Crown Royal Peach, partially offset by the strong launch of Crown Royal Blackberry, and Johnnie Walker was down 10% but is outperforming the Scotch category, according to the company. Smirnoff (-3%), Ketel One (-5%), and Captain Morgan (-6%) also logged North America sales declines for the year.
Looking ahead, Diageo sees challenges at the consumer level continuing in the current fiscal year, noting, “The consumer environment continues to be challenging with conditions we saw towards the end of fiscal 24 persisting into fiscal 25. We will continue to focus on strengthening the resilience of our business and winning quality market share to drive long-term sustainable organic net sales growth.”—Daniel Marsteller
| Diageo—Top 8 Brands in the U.S. (millions of 9-liter case depletions) |
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| Rank | Brand1 | Origin/Type | 2022 | 2023 | Percent Change2 |
|---|---|---|---|---|---|
| 1 | Smirnoff | Domestic Vodka | 8.8 | 8.4 | -4.0% |
| 2 | Crown Royal | Canadian Whisky | 7.2 | 6.6 | -8.5% |
| 3 | Captain Morgan | Virgin Islands Rum | 5.4 | 5.0 | -6.5% |
| 4 | Ketel One | Imported Vodka | 2.5 | 2.5 | -0.5% |
| 5 | Casamigos | Tequila | 2.4 | 2.5 | 2.9% |
| 6 | Don Julio | Tequila | 2.1 | 2.4 | 14.5% |
| 7 | Johnnie Walker | Scotch Whisky | 2.0 | 2.0 | -2.0% |
| 8 | Bulleit | Bourbon/Rye | 1.7 | 1.8 | 2.9% |
| Total Top 8 Brands3 | 32.0 | 31.0 | -2.9% | ||
| 1 Includes flavors, excludes RTDs. 2 Based on unrounded data. 3 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2024 |
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Tagged : Captain Morgan, Casamigos, Crown Royal, Diageo, Don Julio, Johnnie Walker, Smirnoff
