Outstanding brands
No1
Jose Cuervo is No1 in the global tequila category
No1
Baileys is No1 in the global liqueur category
No1
Johnnie Walker is No1 in the global scotch whisky category
No4
J&B is No4 in the global scotch whisky category
No1
Smirnoff is No1 in the global vodka category
No1
Guinness is No1 in the global stout category
No2
Captain Morgan is No2 in the global rum category
No1
Tanqueray is No1 in the US imported gin segment
Rollover the bottles to find out key data
* Source: Impact Databank Top 100 Premium Spirits (February 2010, September and December 2009)
‘Pace and change is now faster than ever. The strength and breadth of our brand range, built over many years, equips us to be successful and continue to grow.’
now faster than ever.
The strength and
breadth of our brand
range, built over many
years, equips us to
be successful and
continue to grow.’
Brand performance
Stronger performance in scotch in the second half resulted in full year net sales growth of 5%. Strong growth in developing markets was the key driver of overall Johnnie Walker brand performance. Johnnie Walker Black Label had double-digit net sales growth driven by Global Travel and Middle East, Latin America and South East Asia. J&B continued to be affected by the decline in the spirits market in Iberia. Buchanan’s and Old Parr performed well in Latin America.
Vodka was the most competitive category in the developed markets. In North America, Smirnoff net sales declined mainly due to lapping the increase in stock levels of the prior year. Effective marketing campaigns, including the ‘Be There’ programme, drove share gains in the United States and volume grew ahead of net sales in Great Britain through promotional activity. In the brand’s largest developing markets of Brazil and South Africa, net sales grew solidly. Diageo’s super/ultra premium vodkas – Ketel One and Cîroc – remained in strong growth.
Baileys grew volume and net sales in a strong second half performance due to new flavours and greater on shelf visibility, but this did not offset a difficult start to the year.
Very strong growth of Captain Morgan in Europe and International offset the net sales decline in North America. In the United States, growth of the rum category slowed during the year but Captain Morgan benefited from successful innovations and increased marketing spend, and grew share. Rum brands grew well, in particular Cacique and Zacapa.
The ongoing weakness of the North American on trade channel and aggressive pricing from competitors led to a sharp decline in Jose Cuervo. The new variant Especial Silver continued to perform well and is now the fastest growing silver tequila in the US off trade.
Double-digit net sales growth of Tanqueray in Spain and Great Britain only partially offset net sales decline in North America.
Guinness posted flat net sales with strong double-digit growth in South East Asia broadly offsetting a 2% decline in Europe and flat net sales in Africa. In Great Britain and Ireland, Guinness once again gained share but net sales declined as a result of the continued decline of beer in those markets. While Guinness performance slowed in Africa as some consumers chose to trade down to less expensive products, Diageo’s local lager brands – notably Harp and Tusker – had strong net sales growth.
Marketing spend
Marketing spend was up 3% driven by major increases in proven campaigns behind Diageo’s most important brands and categories in the second half. This resulted in double-digit increases in full year spend behind vodka and rum categories, and a significant increase in spend behind scotch, particularly Johnnie Walker in International. Marketing spend for Baileys was reduced as part of the current review of the brand’s programme, while a decrease in Guinness spend in Europe was broadly offset by increases in the other regions. Spend was down 2% on ready to drink and up 7% on wine.
Customer marketing
Diageo continued to invest to enhance the capabilities of its customer marketing function which now consists of about 500 people in over 30 countries covering over 80% of Diageo’s net sales. Diageo made it easier for shoppers to find, choose and buy products in the spirits category, forming partnerships with customers which helped them to offer the right range of products, the appropriate amount of shelf space and providing navigation through signage.
Innovation
Innovation remains a key element of Diageo’s organic growth strategy, and in the year it delivered another strong performance. The overall approach remains simple: to innovate on core brands, to deliver ideas rooted in deep consumer and shopper insight. Key areas of focus for innovation include: using innovation to bring new premium offerings to consumers, as exemplified by the success of our launches on the Johnnie Walker brand range like The John Walker; using innovation in developing markets to increase consumer accessibility of Diageo brands and to target new occasions, such as canned beer and premix spirits in Africa; and maintaining brand relevance and consumer interest in developed markets through innovation across a broad range of occasions and categories as demonstrated by flavour innovations on Cîroc Coconut and Red Berry in North America.