Diageo’s fastest growing brands in 2013

While Diageo reported a sales decline of £1.1bn today, its spirits sales were “broadly flat”, with pockets of success in its leading brands, some of which grew faster than their relative markets.

Bushmills is one of Diageo’s fastest growing brands this year, but is it the swiftest?

The majority of Diageo’s fastest-growing brands in 2013/14, as outlined in its full-year financial results, were bolstered by strong performance from the US, which offset declines in emerging markets and Western Europe.

However there are a few “local gems” that off a smaller base, benefitted from localised economic and cultural changes, such as the shift in Venezuela from aspirational, premium Scotch brands, to local spirits.

According to Diageo’s 2013/14 financial results, for the year ending 30 June 2014, the majority of the group’s marketing spend is behind its whisky portfolio, with vodka coming in second.

However the two categories vie for the largest share of Diageo’s volumes, both accounting for around 25% of the group’s overall portfolio.

Volume aside though, the following is a list of Diageo’s fastest-growing brands during the year, from both large and small brands alike. In some cases, their performance is a sign of general category and market trends.

All percentage increases in this article reference organic net sales growth, unless otherwise stated.

Alternatively, click here to see Diageo’s 2013/14 full-year financial results.

10. Captain Morgan

Diageo’s Live Like the Captain campaign helped bolster sales for the Captain Morgan rum brand, which grew by 6% in the year.

Sales were driven primarily by its core US market, where Captain Morgan White launched in February, as well as the UK, Russia and Eastern Europe and Australia.

9. Tanqueray

Overall gin sales grew by 3% in the period, with 6% coming from Tanqueray, which saw increases across all regions.

The strongest performance was seen in Western Europe, particularly in the UK, Germany and Iberia, as well as in Latin America where sales were driven by Brazil, Mexico and Colombia.

In the US, shipments were impacted by higher stock levels at the start of the financial year, although depletions “performed well”.

The brand’s super-premium extension Tanqueray No. Ten was re-launched in a new bottle format earlier this year.

8. Ketel One

Super-Premium vodka brand Ketel One increased organic net sales by 6% in the fiscal year, with growth driven by its core US market.

However, the Netherlands-produced vodka grew by over 40% outside the US, led by sales in Australia “almost doubling” and “strong performance” in Western Europe and GTME.

Diageo currently owns 50% of Ketel One, with the other half belonging to the Nolet Group.

7. Bushmills

Diageo’s only Irish whiskey brand grew 7% during the year, an achievement the group claims was driven by the Bushmills Live music platform and Bushmills Honey.

While Irish whiskey is experiencing strong growth in the US at present – exports were up 17.9% in 2013 (IWSR) – Diageo claims Bushmills’ core markets are Russia and Eastern Europe, Germany and GTME.

6. Cacique

Local Venezuelan rum Cacique benefitted from consumers’ switch from Scotch whisky to more affordable, local spirits.

The brand increased net sales by 16%, apparently also driven by volume growth and price increases.

5. The Singleton

With more aspirational single malt brands beginning to attract consumer attention away from standard and premium blends, Diageo’s single malt The Singleton grew by 17% during the year, albeit of a relatively smaller base.

4. Zacapa

Diageo’s super-premium rum brand grew net sales 22% in the period, helping drive overall rum category growth of 7%.

Zacapa grew by 37% in its largest region, Western Europe, with strong growth also in Russia and Eastern Europe, and North America.

The group focused on rolling out luxury pop-up lounge concept, the Zacapa Rooms across Western Europe throughout the year.

3. Lagavulin

The Islay Scotch single malt saw sales increase by 23% in 2013/14, as interest in single malts mixed with increased visibility reaped rewards for the brand.

2. Don Julio

Diageo’s Tequila portfolio grew 34% driven by “strong performance of Don Julio”, which itself grew 27%.

The group claims increased marketing support, through campaigns such as Elevate your Summer and Your Margarita Crafted drove interest in the brand.

Outside the US, Don Julio saw “particularly strong growth” in Western Europe and Australia.

Diageo acquired two additional Tequila brands within the 2013/14 financial year – DeLeón, a 50:50 partnership with US rapper Sean “Diddy” Combs, and the outright acquisition of super-premium Peligroso.

However, CEO Ivan Menezes hinted at the group’s half-year results presentation that further Tequila acquisitions could come further down the line.

1. Bulleit

Diageo’s flagship American whiskey proposition, Bulleit, grew ahead of the market during the year, with a 69% net sales increase driven by the US and new markets.

Whiskey sold within the US reached 52.7m cases in 2013, up 6.2% year-on-year according to the Distilled Spirits Council of the US (Discus).

Although analysts recently warned that Diageo’s focus on vodka rather than American whiskey could cause share losses in the US market, the drinks group is investing US$115m in building an American whiskey distillery in Shelby County, Kentucky.

The distillery will be used to distil “current and future” brands, and confirmed Bulleit Bourbon will eventually be produced on site.

Bulleit’s range includes a NAS Bourbon, a 10-year-old Bourbon and a rye