Diageo is working to boost its e-commerce business in Europe

Diageo is working to boost its e-commerce business in Europe

The president of Diageo's Europe, Russia and Turkey unit has said online retail lends itself to high-end drinks sales. 

John Kennedy said Diageo's reserve brands work well in the e-commerce environment. He was speaking to analysts earlier this week, on the company's regional call with presidents.

"There is a natural fit with our luxury portfolio in an online environment where you can personalise products and where special events, like a Black Friday, are particularly suited to our luxury and our reserve brands," he said. 

The reserve portfolio, which includes Don Julio Tequila and Tanqueray 10 gin, grew European sales in fiscal FY16 by 13%.

Elsewhere in the company's portfolio, Kennedy said there are a "variety of situations" to sell online, all with different margins. 

"We do believe that... our full portfolio can thrive in the digital environment, and deliver healthy pricing and margins... the mix does tend to be good."

Kennedy said Diageo has been improving its shopper marketing capability online. The company now has 24 people who are dedicated to "figuring out 'what does online shopping look like'". 

In a note following the call, Barclays analyst Simon Hales said e-commerce now represents 3% of European sales for the company and is "growing at high double-digit rates". He said Diageo's share of this channel "exceeds its traditional off-line share".

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