Diageo’s U.S. Spirits Sales Rise 8% In Full Year, As Whisky Brands SoarJuly 31, 2013
Innovation within its whisk(e)y portfolio drove Diageo’s U.S. spirits business to 8% sales growth on a 3% volume increase in the 12 months through June, its full fiscal year. Crown Royal, whose net sales surged 17% on the back of the launch of its new Maple Finished extension, led the way, with Johnnie Walker (+12%), Buchanan’s (+19%) and Bulleit also providing double-digit gains. Crown Royal and Bulleit alone accounted for more than 45% of Diageo’s U.S. net sales growth during the period, the latter boosted by its recently launched 10-year-old extension. Johnnie Walker was strongest at its higher pricing tiers, with Black Label and Blue Label leading the charge.
Diageo North America president Larry Schwartz said that along with successful innovations like Crown Royal Maple and Bulleit 10, price increases and a marketing spend upped by 11% helped drive the group’s performance. “We increased our media spend on our strategic brands by 50% over last year and currently have on-air campaigns for all of our core brands,” Schwartz noted in a statement to SND.
In white spirits, Tanqueray gin posted 11% sales growth during the year, while Smirnoff rose 5%, lifted by its recent Kissed Caramel, Iced Cake and Root Beer Float flavors. Surprisingly though, Cîroc vodka, which jumped by 58% in Diageo’s fiscal 2012 (ended June 30, 2012), increased only 1% in fiscal 2013, with net sales up 4%. Cîroc is down 10% year-to-date in control states, with growth also slowing in IRI channels, although Diageo said its new Amaretto flavor helped boost shipments in recent weeks.
Meanwhile, the Diageo Chateau & Estate wine business turned around with 3% organic sales growth, as the unit launched several new products, including A by Acacia Unoaked Chardonnay, Sterling Vineyards Carneros Pinot Noir and Sterling Vintner’s Collection Aromatic White, as well as Beaurouge, a red blend from Beaulieu Vineyards. “We’re now the number-one supplier of innovation wines in the $10-$14.99 price range,” Schwartz said. On the beer side, Diageo Guinness USA had a difficult year, with net sales down 6%.
Globally, Diageo posted 5% net sales growth to $18 billion with its Latin America & Caribbean (+15%) and Africa, Eastern Europe and Turkey (+10%) divisions making solid contributions, in addition to North America’s strong showing. The group’s Asia Pacific business was up 3% during the year, while Western Europe declined 4%.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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