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Diageo North America President Debra Crew Lays Out The Gameplan

November 17, 2020

Former Diageo board member Debra Crew took over as president of the company’s North America business in July, at one of the most tumultuous times the drinks industry has ever faced. After a strong fiscal first quarter in the three months through September, Crew said the drinks giant is well-positioned to drive further growth in the months ahead, leveraging e-commerce investments and the rapid progress of its North American whiskey and Tequila portfolios.

In an analyst call yesterday, Crew noted that premiumization in the spirits category is now “accelerating above pre-Covid levels,” and said she expects that positive trend to continue. The super-premium-plus segment is gaining significant share, bolstering growth for key Diageo labels like Crown Royal, Bulleit, Don Julio, and Casamigos. Crew said tailwinds from the influx of younger, multicultural consumers will help drive those and other brands looking ahead, noting that Crown Royal overindexes with African-American consumers, and Buchanan’s and Johnnie Walker both overindex with Latinos.

Crew added that Diageo is upping its investments in e-commerce to seize the exploding opportunity in that category. “We have more than doubled our A&P investment in e-commerce in the last 18 months,” she said, noting that delivery platform Drizly has more than tripled its business this year and expects 20% of all off-premise alcohol purchases to take place online in the next five years. “Our e-commerce business has a more premium mix of brands, and the rate per-case is typically 15%-25% higher than our business in brick-and-mortar.” E-commerce consumers tend to skew younger and more urban than the general market, opening further opportunities for Diageo’s key whiskies and Tequilas.

Crew also touted some upcoming portfolio innovations, including Baileys Deliciously Light, which has 40% less sugar and calories than the core label, as well as Guinness Nitro Cold Brew Coffee. Other new offerings include RTD cocktails across the Tanqueray, Ketel One, and Crown Royal brands. Recent additions like Captain Morgan Sliced Apple and Baileys Apple Pie have seen a favorable reception in the early going, she added. Following Diageo’s $610 million acquisition of Davos Brands—which she explained was attractive not only for Aviation gin but also portfoliomates Astral Tequila and Sombra mezcal—Crew said the company “will continue to look for opportunities to acquire fast growing brands in exciting categories,” moving forward.—Daniel Marsteller

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