Diageo sales slowed by ‘weak’ markets

Diageo has reported a slow down in sales caused by weak emerging markets in the final six months of 2013, but said it was confident it had absorbed the impact by reducing inventory in some of its most challenging markets.

Ivan Menezes, chief executive of Diageo.

Ivan Menezes, chief executive of Diageo.

The drinks company, responsible for brands including Johnnie Walker whisky and Guinness, said net sales had grown by 1.8% in the first half, much slower than previous growth of 2.2% in Q1.

Total emerging market net sales rose by 1.3% and north American sales were up by 4.6%, but Western Europe saw a drop in sales by 1%.

Within its portfolio, super and ultra premium brands grew strongly, with reserve brands up 18.5%.

Beer was the only category to decline, down 2.6%, with weakness in Nigeria and Ireland.

Ivan Menezes, who took over as chief executive of Diageo six months ago, said the company had fared well in a period which saw a “more challenging emerging market environment.”

Increased sales in the US and “improved” performance in Western Europe, he said, allowed the company to “absorb” current challenges in some of our emerging markets.

He said: “We reacted quickly to the changing emerging market environment, reducing inventory levels in several key markets, which led to a weaker Q2, and tightly managing our cost base to deliver improved operating margins in line with our expectations.

“We continued to invest in the business increasing marketing spend ahead of net sales growth and keeping our strong focus on innovation and route to consumer improvements.

“In the first half the organisation has aligned behind the six key performance drivers which I identified when I was appointed CEO; premium core brands, reserve, innovation, route to consumer, cost and talent.

“This clarity of focus at a market level enables me to take the changes I have already made to the operating model to the next level.

Menezes said that detailed plans would be laid out over the next two months in a bid to “simplify our processes and de-layer our organisation” to create a more “agile, accountable and effective organisation”.

As part of this plan, the company aims to deliver cost saving of £200m by the end of the financial year in 2017 to fund future growth and investment.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Marketing Manager

Amathus Drinks Plc
London, UK

Partner Manager - Manged On-Trade

Maverick Drinks
London, UK

Brand Manager

Hatch Mansfield
Ascot, Berkshire

Head of Sales

IWSC
London, UK

Logistic and Fullfilment - Whisky (and wine) administrator

Stilnovisti Ltd
London, United Kingdom // Dufftown, Keith, United Kingdom

Account Manager

Harviestoun Brewery
Field Based, UK

Buyer - Spain & South America

Enotria&Coe
London, UK

Events Sales Manager

Enotria&Coe
Field based - London or surrounding area

Sales Director Europe

Mirabeau Wine
Europe

Argentina Breaking New Ground Masterclass Series

Edinburgh,United Kingdom
18th Oct 2018

IBWSS China

Shanghai,China
5th Nov 2018

Exploring Beaujolais Wines Across The Years & Appellations

Manchester,United Kingdom
6th Nov 2018
Click to view more

Green Awards 2018

Deadline : 19th October 2018

Rioja Masters 2018

Deadline : 26th October 2018

Click to view more

The Global Sparkling Masters 2018

As with all of the drinks business awards, our judging panel is comprised of Masters of Wine, Master Sommeliers and senior buyers making the competition globally renowned.

Champagne Masters 2018

Enter your wines into the Champagne Masters 2018, the only blind competition dedicated to Champagne in the UK.

Click to view more