LatAm, C’bean stand out in Diageo sales

British multinational alcoholic beverage producer Diageo is reporting preliminary full-year results to June 30, with net sales increasing by 8.3 per cent year-on-year to £12.7 billion.

Operating profit of £3.7 billion climbed by 74.6 per cent.

Three of Diageo’s five regions — North America, Africa, and Latin America and the Caribbean — closed the year with organic net sales above fiscal 2019 on a constant basis. Among these, the Caribbean region showed the strongest growth performance.

Latin America and Caribbean’s organic net sales increased 30 per cent with all markets growing, excluding travel retail. Scotch had a strong recovery, growing 30 per cent, with strong double-digit growth for Johnnie Walker, Buchanan’s and primary Scotches.

Travel retail sales, however, declined by 63 per cent due to various travel restrictions associated with the global effort to contain the novel coronavirus pandemic.

Organic net sales growth climbed 16 per cent, with the group’s largest and most profitable market, North America, posting organic growth of 20 per cent year-on-year.

Europe, the group said, benefited from strong consumer demand in the off-trade channel and the gradual recovery of the on-trade channel in certain markets.

Diageo said volatility remains high in some key markets, including India, while travel retail (sales down 62 per cent year-on-year) remains “heavily impacted by ongoing restrictions on global travel”.

North America organic net sales grew 20 per cent. In Europe and Turkey organic net sales grew 4 per cent, with spirits and ready-to-drink beverages growing double digits, while beer declined 21 per cent.

The company said that northern Europe, Great Britain and Turkey saw strong recovery, but travel retail in Europe declined -56 per cent, reflecting the continued restrictions on international travel.

In Africa, organic net sales grew 20 per cent, with all markets – excluding travel retail – growing, despite restrictions. Beer organic net sales grew 19 per cent mainly driven by Guinness and Malta Guinness. Spirits organic net sales grew 21 per cent, mainly driven by consumer demand for mainstream spirits.

In Asia Pacific, organic net sales grew 14 per cent, following a 16 per cent decline in fiscal 2020, driven by strong recovery in “Greater China” and Australia.

The Asia and Middle East travel retail business continued to be “impacted significantly”. In fiscal 2021, Diageo’s business in Greater China grew 38 per cent supported by strong growth in Chinese white spirits and Scotch.

Management, in its results announcement said: “By increasing the visibility and ease of purchase for our brands online, we have driven strong performance with some of our largest e-commerce customers.

“Diageo remains number one in spirits retail sales on Amazon in Europe, number one in spirits retail sales on Drizly in the US and, in China, we’ve maintained our leadership in whisky on Tmall. As well as building on our partnerships with e-retailers and traditional trade channels, we are developing our own e-commerce channels.”