Interview, Part 1: Debra Crew, President, Diageo North AmericaMarch 15, 2021
Debra Crew was named president of Diageo North America last summer, having previously served on the company’s board. In the drinks giant’s fiscal first half through December, Diageo North America’s net sales increased 8% to £2.7 billion ($3.8b)—representing nearly 40% of Diageo’s total net sales—and operating profit rose 9% to £1.2 billion ($1.7b). Shanken News Daily executive editor Daniel Marsteller recently caught up with Crew to discuss recent developments across the portfolio and what’s in store looking ahead.
SND: You took over responsibility for Diageo’s North America unit at an incredibly tumultuous time. What have you seen across the business in the early going?
Crew: We’re seeing the largest increases in share gain that we’ve had in total spirits in nearly two years. First and foremost it’s because of the agility of our team. We’ve been building up our digital insight and data tools to help us in execution, and we’re seeing the benefits of those capability builds, which have enabled us to upweight investment and have very targeted and effective marketing. That has allowed us to act on emerging trends, creating occasion-based specific shopper programs in the off-trade, and developing cocktails-to-go with our on-trade partners. We’ve been increasing our digital investment. Only one in three consumers even knew you could buy spirits through e-commerce before Covid. Contrast that with one week during the peak of quarantine when one in three spirits were bought via e-commerce.
SND: Zeroing in on Tequila—one of the hottest areas of the market—what’s driving the performance of brands like Don Julio and Casamigos?
Crew: Tequila has been a key growth driver for us, specifically Don Julio and Casamigos. These were great investments and acquisitions that we made years ago that are paying off for us now. Don Julio, in the first half, grew 56%. Casamigos grew 139%. And of course these are premium price points. We’ve also got a broader portfolio in Tequila, with DeLeon, which is a brand we just relaunched with Diddy and his team at Combs Wine & Spirits that’s doing really well. We also picked up Astral Tequila as part of Davos Brands, and we’re relaunching it.
SND: Whisk(e)y is another growth category. How is the U.S. outlook for Crown Royal, Bulleit, and Johnnie Walker?
Crew: Crown is the most valuable whiskey in North America. We’re seeing growth on Deluxe, and great growth continuing on innovations like Apple and Peach, which has been our limited edition, bringing new consumers into the franchise. Bulleit’s another one driving a lot of growth for us, and we’re going to have a lot more liquid moving forward. We’ve got a new distillery in Lebanon, Kentucky that’s coming online this year. Johnnie Walker was up 11% in the first half, and has seen broad scale growth across all variants recently, including Red, Black, and Blue Labels.
SND: Vodka has been more challenging in recent years, but last year Smirnoff and Ketel One both saw volume growth, according to Impact Databank. What are your plans in the vodka space this year?
Crew: Our vodkas in the first half grew by 6%. We’ve done some great innovations with things like Smirnoff Spicy Tamarind, which we’ve launched both in vodka format, as well as in the FMB Smirnoff Ice. And the Ketel One Botanicals remain very relevant for today’s market. With Cîroc, we continue to have great limited time offers that help drive the brand, and we’ve got another one coming this summer.
|Diageo―Key Brands in the U.S.
(millions of 9-liter case depletions)
|Crown Royal||Canadian Whisky||6.88||7.23||5.1%|
|Captain Morgan||Virgin Islands Rum||5.50||5.58||1.5%|
|Ketel One||Imported Vodka||2.40||2.53||5.5%|
|Johnnie Walker||Scotch Whisky||1.85||1.89||1.9%|
|Total Key Brands2||32.0||33.3||4.0%|
|1 Includes flavors.
2 Addition of columns may not agree due to rounding.
3 Based on unrounded data.
Source: IMPACT DATABANK © 2021