Tomorrow, Diageo will release the results from its fiscal half-year and the three months to the end of December. Here, we take a look at the main events in the company’s fiscal second quarter.
- In early-October, Diageo readied a broader roll-out for its high-profile single-grain Scotch whisky brand, Haig Club. The extension of the David Beckham-fronted Scotch to China, South Korea, Vietnam, Malaysia, Singapore and the US prompted just-drinks to ask if the brand justified the hype
- Also in October, the firm launched two variants from its Smirnoff Ice RTD in India. The growing popularity of vodka in the country was cited as a reason for the release, with Smirnoff Ice and Smirnoff Black looking to make in-roads into Bacardi’s 97% market share of India’s RTD segment
- In a just-drinks exclusive, Diageo confirmed in late-October that it has put the brakes on its Scotch production investment programme. Slowing sales globally prompted the company to put its five-year, GBP1bn (US$1.55bn) spend on hold, although Diageo said it would “continue to review and adjust the timing of the next phase of our investment programme … to retain the alignment between growth in production volumes and growth in demand”
- Diageo was toasting with Tequila in early-November, when it secured full control of the Don Julio Tequila brand from joint partner Casa Cuervo. The acquisition of Don Julio cost the company US$408m as well as the Bushmills Irish whiskey brand and distillery. Diageo inherited Don Julio through the carve-up of Seagram in 2002, but sold half of the brand to Casa Cuervo in 2003. Had the company admitted defeat to Pernod Ricard’s Jameson in the Irish whiskey category?
- The fruits of Diageo’s ‘Show Your Spirit’ initiative, announced in 2013, came to bear in late-November, when Jinzu sake gin was unveiled. The spirit was created by a UK bartender, who spent a year with Diageo readying the release
- The company was dealt a blow in India in early-December when shareholders in United Spirits voted against a proposal to allow the Diageo majority-owned unit to produce and sell some Diageo spirits brands in the country. After lining up a new vote in mid-December, Diageo finally got shareholder approval for the move in early-January.
- Group sales dipped by 1.5%
- Volumes fell by 3.5%
- Asia Pacific proved a drag on performance, with sales in the region sliding by 7.4%