Diageo Sales Surge Behind U.S. Spirits Growth

Global drinks giant Diageo reported a higher-than-anticipated half-year profit yesterday, thanks to surging sales in spirits.

The maker of Johnnie Walker, Smirnoff, Captain Morgan, Crown Royal and Tanqueray reported a profit of $1.9 billion for the six months ending Dec. 31. This is up from $1.41 billion in profit during the same period one year back.

Sales in North America were up 3%, while U.S. sales were up 3.6%. This a positive sign for the London-based company that in recent years has struggled in the U.S, its biggest market.

U.S. spirits sales increased 4%. Whiskey was the primary driver.

Net sales of Diageo whiskey grew 15% in North America, as “Crown Royal and Bulleit continued to gain share in a vibrant category,” the company said in a press release. “Scotch growth was driven by reserve variants and Johnnie Walker Black Label, with net sales up 11% and 9%, respectively.”

Crown Royal net sales increased 17% , while Johnnie Walker grew 5%.

Bulleit was up 29%.

In tequila, Don Julio increased 10%.

Guinness grew only 1%, while Smithwicks and Harp were even weaker. Overall beer sales by Diageo in North America grew 3%.

Recent changes implemented in the U.S. by the company seemed to have helped. Diageo in the past year reorganized its U.S. management, reduced costs, refined marketing approaches and focused better on top sellers at retail.

“Diageo is building a stronger, more consistent, better performing company,” said Ivan Menezes, Diageo chief executive, in a press release. “We are identifying consumer trends faster, expanding the reach of our products across markets and developing trade channels to capture these growth opportunities.”

 

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