Diana Napau Buttu’s Post

This is interesting! Score one for the red-headed step-children. Diageo acquired Astral Tequila (and some more brands) when it bought Davos Brands, essentially so it could get hold of Aviation Gin. But unlike what Pernod subsequently did* when it acquired Castle Brands in order to get its hands on Jefferson’s whiskey, Diageo seems to be integrating at least one of their accidentally acquired brands into its portfolio, by using Astral in a bottled margarita. *Farmed out most of Castle’s other brands - Knappogue Castle whiskey, Clontarf whiskey, etc., plus Plymouth gin** and Power’s whiskey - to a “foster parent”, Lafayette Imports. **Also an accidentally-acquired brand that came along with the ABSOLUT purchase! https://lnkd.in/eEg276fR

Diageo: The Hidden Gem in Your Drink Cabinet What if I told you there’s a company behind some of the most iconic drinks in the world, quietly raking in profits while you enjoy your favorite cocktail? Meet Diageo. They own a 34% stake in Moët Hennessy and are the global king of premium drinks. Think Johnnie Walker, Smirnoff, Guinness, and Crown Royal. Impressive, right? Now, here’s the kicker: Diageo’s magic lies in its unbeatable moat. Their brands have cult-like loyalty, making them nearly immune to competition. Ever tried launching a new whiskey brand? Good luck. The long maturation process creates sky-high entry barriers. Plus, in today’s world, people prefer sipping better, not more. This premiumization trend plays right into Diageo’s hands, giving them strong pricing power. However, recent challenges have created an intriguing opportunity. The LatAm and Caribbean regions are suffering from excess inventory, and Diageo has misjudged demand, leading to a double-digit decline in topline revenue in these regions. The LatAm and Caribbean markets make up 10% of the company's total revenue. Additionally, the new CEO is fairly new and untested, and the CFO was let go due to poor financial forecasting, planning, and communication. Because of these reasons, the stock is trading at a compelling 17x PE NTM and has a free cash flow yield of ~5%. But remember, this is a resilient business with secular demand from emerging markets, which make up 40% of the total topline. Diageo holds a mere 6% of the total beverage alcohol market—a market worth a staggering $962 billion globally. And guess what? Spirits, their forte, are growing twice as fast as beer and wine. With a 6.3% organic growth rate over the past six years and projections of 5-7% CAGR till 2027, they’re on a roll. Diageo’s capital-light model means they churn out high returns on invested capital, scaling effortlessly. In a nutshell, Diageo is not just surviving; they’re thriving. They’ve cracked the code on how to blend tradition with innovation, making them a force to be reckoned with in the beverage world. So, next time you sip that drink, remember the hidden gem making it all possible: Diageo.

Johnnie Walker maker Diageo sees first sales drop since the pandemic—but Guinness and ready-made cocktails save the day https://ift.tt/mD3xUtA People aren’t drinking as much as they used to. And no one knows that better than Diageo, the alcohol giant behind Johnnie Walker, Don Julio and Guinness. The London-headquartered company saw its net sales decline for the first time since COVID-19, down 1.4% to $20.3 billion in the 12 months to June compared to the same period a year earlier.  Much of the decline was down to Diageo’s business in Latin America and the Caribbean, where volumes slipped by 21% as the company tried to normalize a pandemic-era inventory glut.  The group has faced pressure as budget-tight consumers switch to cheaper alcohol brands and look away from Diageo’s suite of premium spirits. Diageo’s peers share some of its struggles—for instance, Remy Cointreau, the cognac maker, saw its quarterly sales slip last week. LVMH’s wine and spirits business has also struggled to pick its sales up in the first half of the year.    The company issued a profit warning in November, anticipating weaker results in the fiscal year’s second half.   “Interest rates are high, therefore retailers are also likely to remain cautious. We will stay focused on strengthening the resilience of our business and winning with the consumer,” Diageo’s CEO Debra Crew told reporters during a call on Tuesday. She said that despite pockets of downtrading, the “merit of our portfolio is that we really do have very broad options for the consumer” in terms of product range and price points. Despite the macroeconomic volatility impacting Diageo’s business, some areas of Diageo’s business kept the business humming. For instance, in its biggest market—the U.S.—the sales of spirits-based cocktails, such as Ketel One Espresso Martini and Tanqueray Negroni, jumped 15%.  The rise of women Guinness drinkers In Europe, overall net sales grew 3%, thanks to Diageo’s beer stronghold with Guinness. Women have increasingly been choosing Guinness—the brand noted a 27% increase between the last two fiscal years, which has helped boost the stout’s popularity.     “We believe demographic trends, rising incomes in the developing world, spirits, gaining share from beer and wine and long-term premiumization will drive attractive underlying growth in our industry,” Crew said.  Diageo has also seen key leadership changes in recent months. Long-time CEO Ivan Menezes retired in 2023, while Crew took over. CFO Lavanya Chandrashekhar also announced she would be stepping down earlier this year. Set against these shake-ups, shrinking profits may make it harder to calm investors’ nerves. “The guidance is very vague and won’t help improve sentiment, pointing to a continued challenging consumer environment into FY25 and ongoing pressures on margins,” Bernstein analyst Trevor Stirling said in a note Tuesday.  The London-listed company said it was addressing some of its weaknesses, incl...

Big news for the drink aisle! Diageo's rolling out fancy ready-to-drink cocktails. Think Johnnie Walker, Tanqueray, and Cîroc in a can. This is huge. It means more people will be eyeing the cocktail section. And that's brilliant for the challenger brands we love to root for, like: MOTH Drinks Tapp'd Cocktails Ltd FUNKIN COCKTAILS | B Corp™ NIO Cocktails Served Drinks Diageo stepping in? It's not just competition. It's proof our favourite underdogs are on to something big. So, to the challenger brands out there, keep shaking things up. Your unique twists, your bold flavours, they're what make this space exciting. At North Star, we're all about helping you get your drinks out there, and grow. Because when one of us shines, we all do. https://lnkd.in/easywjqy #FMCG #ChallengerBrands #NorthStar

A very good article in ft.com regarding the recent share price💲performance of the leading global alcohol 🍸 🍷 🥂 companies. Purveyors of alcoholic beverages have clearly had a terrible time of late. Shares in Diageo, Campari, Pernod Ricard and Rémy Cointreau are down between 20 and 40 per cent in the past 12 months. There is no shortage of good reasons. Diageo’s stumble is in part home-grown, given its stocking troubles in Latin America. Rémy Cointreau and Pernod Ricard have been hit by fears that China might impose tariffs on brandy. Most worrisome of all for companies across the sector is the fact that the US — the world’s most lucrative alcohol market — has gone into reverse, with spirit volumes down 3.3 per cent in 2023. However all this looks overly despondent. Despite current wobbles, selling alcoholic drinks remains a good business. When the Covid-era hangover finally clears, this will be a sector in which annual volumes grow by perhaps a couple of percentage points a year, prices rise and consumers increasingly choose premium drinks. We can all say cheers 🍸 to this! **this aricle is not investment advice** #alcohol #beverages #ft #financialtimes Lars Jensen Paul Villis Michel Aubanel Gilles Halotel Carol Dunne Jean Noel Ortal Jean-Philippe Delforge Kristof König Linda Chatton Stephen Rannekleiv Jim Watson Bourcard Nesin Francois Sonneville Virginia Traldi David Deeley Brian Short William Lynch Thomas Hahlin Ahlinder Sheelagh Pentony

Can Paloma (Tequila cocktail) boost Diageo sales as Spritz did for Campari's Aperol? This article from WSJ underlines the ambition of Diageo to "take Tequila around the world". Beyond Diageo CEO personal goal to reassure financial analysts after recent profit warning, I wonder if such an annoucement could kill the goose that lays the golden egg: New categories take long time to build, from emotionally recruiting prescriptors in the on trade, to generate trial from consumers, then build long lasting brands, etc... Here is the article: Can Tequila Really Go Global? This Booze Boss Is Giving It a Shot     Shortly after taking the helm at the world’s largest spirits maker, Diageo CEO Debra Crew made a bold proclamation: She plans to take tequila global.   Following a surge in popularity in the U.S., tequila is on track to become the country’s largest spirit this year, an extraordinary milestone for a drink once associated mainly with sugary margaritas and eye-watering shots.   Crew believes she can replicate that success beyond the U.S. and Mexico, which make up 85% of tequila’s sales.   “My ambition is simple: I want to take tequila around the world,” Crew told Diageo investors in August.   The company, which owns tequila brands including Don Julio and Casamigos, has been trying to boost the liquor’s popularity abroad, in part by pushing the paloma, a grapefruit soda-based cocktail it says is easier to make than a margarita.   It sees the paloma as a way to shift perceptions in Europe about tequila being just a shot-based drink and convince drinkers to choose it rather than wine with their food.   The pressure on Crew intensified on Friday, when the company delivered a surprise profit warning, saying consumption in Latin America was weaker than expected. Shares dropped 12%. Crew succeeded former CEO, Ivan Menezes, early June. One of Menezes’s biggest bets was on tequila, which made up just 1% of Diageo’s net sales in 2014 shortly after he became CEO and now accounts for 12%. Tequila contributed about a third of Diageo’s growth over the past four years and the company, which also owns Johnnie Walker scotch, Smirnoff vodka and Tanqueray gin, is now the world’s largest tequila maker by sales.   Menezes acquired a string of tequila brands, including paying up to $1 billion for Casamigos, co-founded by actor George Clooney. “Casamigos changed the game,” says Ivy Mix, co-owner and head bartender of Leyenda bar in Brooklyn, N.Y. “Patron made tequila mainstream for young people but with Casamigos suddenly the Midwestern soccer mom is drinking tequila.”   By the end of this year, U.S. sales of tequila will hit $13.3 billion, outstripping vodka and U.S. whiskey to become the biggest-selling spirits category in the country, according to drinks industry tracker IWSR. Diageo Pernod Ricard Campari Group Beam Suntory Coca-Cola Europacific Partners The HEINEKEN Company Carlsberg Group Brown-Forman

In what can only be described as a meeting of two giants, Pernod Ricard has announced it is to partner with The Coca-Cola Company to release a pre-mixed RTD premium Absolut Vodka and Sprite cocktail made with the CSD giant’s signature lemon-lime taste. This follows the successful launch of Jack Daniels and Coca Cola released a year ago. The initial launch is set for early 2024 in select European countries, including the United Kingdom, Netherlands, Spain, and Germany, it will have a standard abv of 5%, although this may vary from market to market. Francesco Ottaviano, Global RTD portfolio director at Pernod Ricard, added: “While Absolut Vodka and Sprite have long been enjoyed together around the world, we now unite two powerhouse brands in a unique ready-to-drink product. Elaine Maher, associate director, commercial development, at Coca-Cola Europacific Partners GB, which manufactures and distributes Absolut Vodka & Sprite in GB, said: “We know that refreshment is the no.1 preference amongst consumers when making an alcoholic ready-to-drink choice, and that is something Sprite’s Lemon and Lime taste is particularly renowned for." This is sure to be a very succesfull and very lucrative partnership for both players, only time will tell. #markets #cocacola #tccc #absolut #pernodricard  #fmsg #spirts #rtd

What if the history of cocktails was really a reflection of our ever-evolving society? From traditional fermentations to modern innovations, alcoholic beverages have evolved, enriching flavors and techniques. Explore drawbacks, approaches, innovations, unique flavors, market research and market leaders. Some of the leading key players are Anheuser-Busch, The HEINEKEN Company, Bacardi, Pubinno, Krones & Constellation Brands   #AlcoholEvolution #FlavorEnrichment #InnovativeDrinks #MarketInsights #Signicent

From cost inflation and ESG issues to changing consumer behaviour and investment in AI, senior executives at some of the biggest names in spirits give their take on what's to come in 2024. #spiritsindustry #2024outlook

𝗗𝗶𝗮𝗴𝗲𝗼 𝗮𝗱𝗱𝘀 𝗠𝗮𝗿𝗴𝗮𝗿𝗶𝘁𝗮 𝘁𝗼 𝗥𝗧𝗗 𝗿𝗮𝗻𝗴𝗲 👊 😍 Ketel One owner Diageo has added a sixth product to its line of ready-to-drink (RTD) cocktails. Astral joins Tanqueray and Ketel One in The Cocktail Collection The Cocktail Collection officially launched last year with an Espresso Martini, a Cosmopolitan and a Negroni, joining two Bulleit Bourbon cocktails that launched in 2022. The Astral Margarita is made using Astral Tequila, which uses ‘a traditional, time-intensive process to achieve a smooth, bright profile with bursts of citrus and notes of agave’. Diageo acquired the Tequila brand in 2020 when it bought Davos Brands. “We are committed to bringing bartender-quality cocktails straight to our consumers’ fingertips, so hosts can focus on enjoying moments with their guests, worry-free,” said Nikhil Shah, brand director at Diageo. “We are thrilled with the reception of The Cocktail Collection so far and, with the Margarita’s enduring appeal, it is our hope that we will reach even more cocktail enthusiasts with our newest offering.” The 20% ABV Astral Margarita comes in 350ml and 750ml bottles, with RRPs of US$13.99 and US$25.99 respectively. This week, Diageo revealed that its sales for the first half of fiscal 2024 were down, blaming its sales drop in Latin America on a “worse than expected” consumer environment and high inventory levels. In January, behavioural research platform Veylinx revealed that consumer demand for alcoholic RTDs has grown by 20% year on year.