GLOBAL: Diageo targets savings with supply chain restructure
Diageo said the move is due to its greater presence in emerging markets
Diageo has announced a review of its global supply operations aimed at annual cost savings of GBP60m (US$89.4m).
The group's regional structures will be cut back and responsibility for its local operations will be transferred down to its 21 "key" global regions, it said today (11 March). The savings are due to kick-in from 2016, a company spokesperson told just-drinks. Costs associated with the “restructuring” will be around GBP100m.
Diageo said the move is a consequence of its “increasing presence in new faster growth markets”.
The spokesperson added: "A number of the businesses we have acquired have local supply chains, which it makes more sense to manage locally... these changes will give local general managers more accountability and end to end control of their businesses.”
Asked whether the move would result in job losses, the spokesperson told just-drinks: "It is too soon to say, but there is likely to be some impact, as regional structures are reduced.”
Supply of Diageo's Scotch whisky brands, however, will continue to be handled on a global basis. A global supply group will also be retained by the company to oversee operational standards.
The move follows a similar shake-up of its global marketing and sales operations in 2011. The latest change will bring the supply operations into line with this structure.
“Further work will be required to establish the exact nature of the reorganisation to be made,” Diageo said in a statement.
But, it added: "An initial review has already established that efficiency-driven cost savings can be delivered, which, together with savings from footprint changes and cost reductions in respect of the regional supply organisations, are expected to amount to approximately GBP60m per annum."
Marketing a beer brand successfully has traditionally involved partnering with a big event and parting with big bags of cash. But, Larry Nelson has been introduced to a smaller, smarter way to push a ...
A spate of recent trademark rows in the drinks industry has prompted Stuart Whitwell from Intangible Business to cast his eye over some of them, to see if there's a common thread....
Diageo is to spend GBP34m (US$53m) on its Guinness brand in the UK over the next 12 months on a campaign that includes a new TV ad....
- Whatever happened to binge Britain? - comment
- The dangers of squaring up to your competitor
- The US beer market - A level playing field for all
- How to turn a domestic spirit into a global brand
- Remy Cointreau's Q2 and H1 - preview
- Sidney Frank CEO to head Clooney's import co
- Diageo sells off United Spirits' Bouvet Ladubay
- Captain Morgan distillation trial queried by USVI
- Irish whiskey brands could fail without bulk
- Sazerac sues Brown-Forman over Tennessee Fire
- Global Beer Trends 2015 : Global Beer Trends and Long-term Forecasts
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Wine Market to 2019 - Market Size, Development, and Forecasts