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Diageo’s U.S. Sales Rise 5% In First Half, As Whiskies, Tequila Drive Gains

January 31, 2019

Diageo posted solid growth in the U.S. market in its fiscal first half ended in December, as sales in its core U.S. spirits business rose 5%. The drinks giant enjoyed healthy progress across a number of brown spirits brands, resulting in an overall North America sales increase of 6% to £2.36 billion ($3b) and a 4% rise in operating profit, to £1.1 billion ($1.4b).

Crown Royal saw net sales grow 4% on an organic basis in the first half, led by Regal Apple and the limited edition Salted Caramel expression. In American whiskey, Bulleit advanced by 7%. Diageo’s Scotch whisky portfolio jumped by 10%, as Johnnie Walker, Buchanan’s, and the single malt range all made gains. Johnnie Walker’s 10% increase was bolstered by the launch of the Game of Thrones-inspired White Walker bottling.

Tequila likewise contributed to growth, with Don Julio and Casamigos both rising by strong double-digits. According to Impact Databank, Casamigos has roughly tripled in size over the past two years and is now above 300,000 cases. Don Julio is now above 650,000 cases, and continues to surge.

Diageo’s U.S. vodka sales were flat in the first half, although that represents a marked improvement over the 8% decline a year ago. While Cîroc struggled, with organic sales down 14%, Ketel One leapt by 22%, benefiting from the launch of its Botanicals range. Smirnoff slipped by 1%, and in rum, Captain Morgan was down 7% owing to a tough comparison against last year and difficult category conditions.

Across its global business, Diageo’s net sales increased 7% on an organic basis to £6.9 billion ($9b) in the first half, while operating profit jumped 12% to £2.4 billion ($3.15b).—Daniel Marsteller

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