Blog: Europe - the troublemaker?
Olly Wehring | 3 September 2007
A brace of figures last week has highlighted the tough times currently being weathered (no pun intended) of late by drinks companies in Europe.
While Diageo saw its full-year results held back somewhat by Europe, and the UK in particular, InBev warned that volumes in the UK in its second quarter took a 10.7% dip, which "implied some share loss".
Coinciding with tricky conditions in Europe, came a report last week of the potential on offer in the so-called BRIC economies of Brazil, Russia, India and China. The four developing countries have long been seen as potential cash-cows for every drinks company out there.
So, have they all given up the ghost on Western Europe? Of course, they haven't. But, as Diageo CEO Paul Walsh told just-drinks last week: "I don't make irrational investment decisions just to look good in the UK. It's nice, but it's not essential."
With the spotlight moving away from the mature markets, and attention centring on the BRIC economies, companies should still keep an eye on the spinning plate that is Europe. Whilst there are pressures of late on consumers in the UK, premiumisation remains an important driving force in the drinks market here across many of the categories and one poor summer will not put an end to that.
Furthermore, as we have argued on these pages before, investment in the BRIC and emerging markets whilst promising higher rates of ROI, also carry with them far more risk. The political situation in Russia, the fear China’s economy could still overheat, economic uncertainty in Brazil and the regulatory barriers to trade in India mean continuing stellar growth is far from assured.
Whisk(e)y companies spend a lot of money and effort ageing their products for that premium taste....
PepsiCo created a stir last week with the news it is testing a product called Caleb's Kola, with some in the media claiming it was the beginning of a new “craft soda” category....
SABMiller's bid to widen the appeal of beer is very much in evidence at its latest 'House of Peroni' - with beer cocktails and a bigger bottle for the Italian lager brand on offer. ...
Here's a round-up of the big stories on just-drinks last week, featuring PepsiCo, SABMiller, the Scotch whisky category and the US wine market....
- Diageo's future brighter than present suggests
- Diageo's Q1 Results by Region
- Analysis - Remy's Cognac "dead-cat bounce"
- Focus - Remy Cointreau's H1 Performance by Brand
- Three Questions for the Drinks Industry
- Moët Hennessy unveils first Travel Retail outlet
- Diageo puts Beckham centre stage in Haig Club ad
- United Spirits sees Q1 net loss
- TWE unveils Penfolds range after CEO's "bold move"
- Diageo Q1 sales dip "in line with expectations"