- Six-month sales increase 9.4% to GBP9.42bn [US$11.63bn]
- Asia Pacific leaps 17% in six months to end of December, North America up 3%
- Tequila sales by value soar +28%
- Medium-term expectation – fiscal 2023-’25 – of 5%-7% top-line lift
Diageo’s Tequila operations have led the way in the closing six months of 2022, driving the group to a 9% increase in year-on-year sales.
In an announcement that leaned heavily on recent portfolio premiumisation activity, the group claimed success for the strategy, with volumes inching up 1.8% on the corresponding six months – to the end of December – a year earlier. CEO Ivan Menezes also referenced “targeted price increases” as having contributed to performance.
Category-wise, Tequila's 28% sales jump takes the headline, with main brands Casamigos and Don Julio both growing by around the same amount. The segment's importance to Diageo is also on the rise, now accounting for 11% of total group sales, up from 10% in fiscal 2022.
Diageo's vodka numbers, however, suggest the category is experiencing turbulence, particulary in North America: Smirnoff's 11% increase in sales was drowned out by Ketel One and Ciroc, which declined by 11% and 34%, respectively. Elsewhere, Scotch flagship Johnnie Walker - +21% in the half-year - benefitted from both weak comparables a year earlier in Asia Pacific as well as improved trading conditions in Global Travel Retail.
Also of note is the 2% sales slip by Tanqueray. Six months ago, the gin brand was up 20% in the year to the end of June, with Diageo noting today that its gin stable - up by only 3% - posted growth "across all regions except North America".
In reporting region terms, the aforementioned Tequila surge helped sales lift 3% in 'North America', where year-prior calendar-H2 sales had been particularly healthy for most spirits brand owners. 'Asia Pacific' was up 17% in sales terms, meanwhile, thanks to 'South East Asia' and 'Travel Retail Asia & Middle East'. Greater China, however, was less impressive, with Diageo's sales in the country up only 2% and baijiu brand Shui Jing Fang slipping by 7%.
"Sales growth was supported by our continued focus on premiumising our portfolio, bolstered by strong global premiumisation trends," said CEO Ivan Menezes. "As category growth trends continue to normalise following COVID-19, winning quality market share remains a key focus."
Diageo's official half-year fiscal 2023 results announcement.
What to watch for in wine and spirits in 2023 – Market Intel
