GLOBAL PRIORITY
BRAND PERFORMANCE

Smirnoff, excluding ready to drink, performed strongly across all regions with new campaigns and the launch of Smirnoff Black in a number of markets driving overall volume growth. Price increases across most markets resulted in net sales growth.

The International region together with Eastern Europe and Russia led the growth of Johnnie Walker. The strong performance of Johnnie Walker Black Label, Johnnie Walker super deluxe labels and price increases in key markets drove an increased proportion of higher priced sales.

Captain Morgan sustained the strong performance it experienced in the first half of the year. While the key driver of growth is the brand’s performance in North America, it is now delivering double-digit net sales growth in each region.

In Great Britain and Russia, Baileys Original Irish Cream performed strongly, while in Latin America Baileys flavours continued to deliver double-digit net sales growth further supporting Baileys Original Irish Cream. Overall results were constrained by lower volume on Baileys flavours in all regions except International, as the brand’s growth declined against strong comparative figures from its launch in 2007. The success of the global ‘Start a Party’ campaign fuelled J&B volume growth across all regions. Price increases in key markets resulted in an increased proportion of higher priced sales, which in turn drove net sales growth.

While José Cuervo grew net sales in Latin America and Europe, the brand’s performance continued to be affected by the growth of the ultra premium tequila segment in North America. Price increases and more premium launches have helped drive net sales growth in Latin America and Europe.

Tanqueray increased net sales in all regions. North America remained the main contributor to growth, where the brand outperformed the gin category, driven by the continued growth of Tanqueray Rangpur. A price increase on the core brand in North America drove an increased proportion of higher priced sales.

Growth in Guinness was fuelled by double-digit net sales growth in International and out performance against the beer categories in Ireland and Great Britain assisted by successful advertising campaigns. Net sales grew ahead of volume growth driven by price increases in key markets.

NEW TO
DIAGEO

KETEL ONE VODKA

In June 2008, Diageo formed a 50:50 company with the Nolet Group to own the perpetual exclusive global rights to sell, market and distribute super premium Ketel One vodka and Ketel One Citroen. Distilled in Schiedam in the Netherlands, the Nolet Group supplies Ketel One vodka and Ketel One Citroen to the new company. Ketel One vodka extends Diageo’s platform in the fast-growing super premium vodka segment in North America, complementing Diageo’s premium Smirnoff and its ultra premium Cîroc brands. Diageo will bring its outstanding marketing expertise and strong track record of brand stewardship to Ketel One vodka to maximise its potential for global growth.

ZACAPA RUM

Produced in the cool climates of the Guatemalan highlands, Zacapa is one of the most acclaimed rums in the world. In February 2008, Diageo entered a three-year distribution and joint marketing agreement with Industrias Licoreras de Guatemala group of companies for the Zacapa rum brand with a view to broaden its consumer offering in the second largest and fastest growing major spirits category in the world. Zacapa rum forms part of Diageo’s reserve brand collection which includes super premium brands such as Johnnie Walker Blue Label, Tanqueray No. TEN and Buchanan’s Red Seal.

ROSENBLUM CELLARS

It is not just in premium spirits that Diageo has been investing. As part of its total beverage alcohol offering, Diageo also added new premium wine brands to its collection with the acquisition of Rosenblum Cellars in February 2008. Rosenblum Cellars is a leading producer of premium Zinfandel and Rhone varietals in the United States. It has won plaudits from numerous critics, including Robert Parker’s Wine Advocate, who recently called Rosenblum Cellars ‘as good as it gets when it comes to Zinfandel’. As part of the acquisition, founder Kent Rosenblum will continue to make wines and will play a key advisory role in the strategic direction of the brand.