Diageo Lays Out Vision For Continuing Industry Growth
While acknowledging challenging current conditions in beverage alcohol, the world’s top spirits marketer expects improvement moving forward, and says it will leverage its leading position to spearhead growth. Diageo executives presented their case for extending company and industry gains in spirits into the future late last week at the CAGNY (Consumer Analyst Group of New York) conference.
According to Impact Databank, Diageo remains far and away the largest spirits marketer globally at approximately 230 million cases. Earlier this month, the company posted half-year sales up 1% to $10.9 billion, despite a flat performance for its U.S. spirits portfolio. North America accounts for nearly 40% of Diageo’s global sales and almost 50% of operating profit.
Diageo CEO Debra Crew told the CAGNY audience that current headwinds are cyclical, not structural, with inflation eating into disposable incomes. “Consumer wallets are under pressure, and our analysis of U.S. data suggests macroeconomic uncertainty is the biggest factor weighing on current industry volume,” she said. Still, she added, “Consumer spend on alcohol as a percentage of total expenditure has marginally increased over the last decade and held up during the more recent period, reflecting that consumers want to prioritize occasions where Diageo brands participate.”
Crew said that despite narratives around lower alcohol consumption, younger drinkers are in fact migrating into the spirits category. “Moving to Gen Z, U.S. household penetration of spirits is actually increasing and was up six percentage points to 55% in 2024 compared to 2020,” she noted, adding that spirits-based RTDs and Tequila are driving gains.
Moreover, Crew sees premiumization as having further room to run. “Our portfolio is more premium than the spirits industry, with over 60% of fiscal 24 net sales in premium and above, versus the industry average of 35%,” she said. “Premium brands are growing faster, with super-premium-plus price tiers growing at nearly 1.5 times the rate of total spirits, and we expect this trend to continue, positioning us well for future growth.”
Drilling down further on the U.S. market, Diageo North America president Sally Grimes said that while the overall spirits industry has been soft, the company’s inventories have now normalized and the focus has turned to driving accelerated growth through innovation and enhanced commercial execution.
On the innovation front, the strong launch of Crown Royal Blackberry—which jumped out to 635,000 cases in its debut last year, according to Impact Databank—is an example of how the company will approach new product development looking ahead. “Our insights tools pointed to Blackberry as an emerging flavor trend, and we quickly activated our supply organization to launch a limited edition,” Grimes noted. Forthcoming launches include Captain Morgan Sweet Chili Lime and Casamigos Margarita RTDs.
On the commercial side, Grimes said tighter collaboration with distributors and retailers is a priority. “Over the past year we’ve worked with our partners to add new, skilled brand building and sales roles in key geographies dedicated to the categories and outlets with the greatest potential for growth,” she said. “The team equips them with training, tools, and insights to grow whisky and Tequila for the retailer while increasing Diageo’s share. While it’s still early, these investments are delivering returns.”—Daniel Marsteller
| Diageo—Top Eight Brands In The U.S. (millions of 9-liter case depletions) |
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| Rank | Brand1 | Origin/Type | 2023 | 2024E | Percent Change2 |
|
|---|---|---|---|---|---|---|
| 1 | Smirnoff | American Vodka | 8.4 | 7.9 | -6.0% | |
| 2 | Crown Royal | Canadian Whisky | 6.9 | 7.2 | 4.0% | |
| 3 | Captain Morgan | Virgin Islands Rum | 5.0 | 4.4 | -12.0% | |
| 4 | Don Julio | Tequila | 2.4 | 3.4 | 39.6% | |
| 5 | Ketel One | Imported Vodka | 2.5 | 2.5 | -0.1% | |
| 6 | Casamigos | Tequila/Mezcal | 2.5 | 2.0 | -20.4% | |
| 7 | Johnnie Walker | Scotch Whisky | 1.9 | 1.8 | -9.1% | |
| 8 | Bulleit | Bourbon/Rye | 1.8 | 1.7 | -5.7% | |
| Total Top Eight3 | 31.3 | 30.6 | -2.1% | |||
| 1 Includes flavors, excludes RTDs. 2 Based on unrounded data. 3 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2025 |
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Tagged : Captain Morgan, Casamigos, Crown Royal, Diageo, Don Julio, Smirnoff
