World: Diageo taking advantage of changing consumer preferences
British distiller Diageo is dodging consumer confidence headwinds by taking advantage of trends in alcohol and drinking preferences, CEO Ivan Menezes told CNBC on November 21.
We are benefiting from consumer trends where people are drinking better and want better brands and experiences, he said in an interview.
Diageo, the worlds largest spirits company, reported 7.5 percent growth in global sales in its latest results update. Receipts of tequila brands, which make up 3 percent of Diageos net sales, spiked 29 percent, including double-digit growth in Don Julio and Casamigos labels in North America.
Its part of this trend of people wanting more premium brands and enjoying the quality thats behind a Don Julio tequila, Menezes said. People are moving to spirits and cocktails in a bigger way from wine and beer, and people are trading up for more premium brands.
The company also makes Smirnoff, Johnnie Walker, and Captain Morgan labels.
As the partial shutdown of the U.S. government dragged through most of January, while markets worried about the outlook of 2019.
Menezes said the spirits industry is not immune to global economic and spending declines, but theyre better positioned to weather the storm by following trends. Furthermore, sales grew 20 percent in China with scotch brands.
[Its] hard to see a sustained shift yet, but
were watching it closely, he said. That trend is very strong and continues on a secular basis, so while there will be some impact from an economic slowdown, were not seeing it yet.
E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .