Diageo GB sales fuelled by gin and beer

Gin brand Tanqueray delivered strong double-digit net sales growth, while the company reported that Gordon’s gin had benefited from the launch of its Pink variant. Guinness’ net sales increased 8%, driven by strong performance in Guinness Draught and Hop House 13 Lager.

Scotch whisky net sales rose in double-digit percentage terms, mainly due to Scotch malts and Johnnie Walker. Reserve brands also continued to deliver double-digit growth, with a strong general performance, led by increased distribution of Cîroc and the launch of Cîroc French Vanilla.

The business also gained from the knock-on effect of capital efficiencies and inventory reductions during the previous year.

Ireland​

Net sales in Ireland were flat. Guinness grew 1%, driven by the continued success of Hop House 13 Lager and the launch of the ‘Behind Every Town’ campaign across the country, offset by strong performances in gin for Gordon’s and Tanqueray.

In Europe and Turkey overall, Tanqueray was the biggest winner, clocking up organic net sales growth of 20% and organic volume growth of 22%. Captain Morgan rum performed strongly, boosting organic net sales by 10% and organic volume by 6%.

The big loser in the region was J&B Scotch whisky, down 11% in terms of organic net sales and 7% in organic volumes.

Sales, profit​

Global operating profit for the business rose by 6%, from £2.1bn to £2.2bn on net sales up 2%, from £6.4bn to £6.5bn, in the six months to December 31 2017.

“These results demonstrate continued positive momentum from the consistent and rigorous execution of our strategy​,” said Diageo ceo Ivan Menezes. “We have increased investment behind our brands and expanded organic operating margin through our sustained focus on driving efficiency and effectiveness across the business​.

“By consistently delivering on our six strategic priorities, Diageo continues to get stronger: we have better consumer insight through superior analytics, improved execution on brand and commercial plans, and have embedded everyday efficiency across the business through our productivity initiatives. This has enabled continued growth, improved agility, and consistent cash flow generation​.”