Diageo’s top performing brands in 2014/15

The world’s largest drinks group Diageo may have witnessed generally stagnant sales in 2014/15, but some of its brands far outperformed others and reported impressive gains.

These are Diageo’s fastest-growing brands in 2014/15

Revealing its financial results for 2014/15, the UK group said currency volatility, political instability and poor sales in the US had caused its organic profits to fall flat.

While five of the group’s six “global giants”, including Johnnie Walker, Captain Morgan and Smirnoff, witnessed rapid declines, a number of others reported significant gains.

Diageo’s greatest success stemmed from its premium Reserve Brands portfolio, comprised of Bulleit Bourbon and Don Julio Tequila, among others, which reported a net sales growth of 8%.

The group’s Scotch portfolio took a significant hit, with net sales declining by 5%, largely a result of inventory reductions in South East Asia and Latin America. As such, Diageo confirmed that its £1bn Scotch investment plans continued to be “rephased”.

Overall, progress remained subdued even among the fastest-growing brands, but a handful celebrated record results.

Looking across Diageo’s entire spirits portfolio, examining large and small, international and local brands, these are the group’s fastest-growing labels in 2014/14.

For more information on Diageo’s annual performance, click here.

9. Cacique

Change: +3%

Local Venezuelan rum Cacique didn’t quite manage to repeat the 16% growth seen in 2013/14, but its modest 3% gains has allowed it to retain its title as one of Diageo’s fastest-growing brands – a clear sign of the group’s mediocre performance in the year. The brand benefited from certain consumer segments trading down in light of currency volatility in Latin America. In Cacique’s key Brazilian market, Diageo’s performance was affected by a “weaker economy” and “tougher competitive environment”.

8. Yeni Raki

Change: +4% 

Yeni Raki, a clear brandy produced from grapes, raisins, and anise performed “strongly” in its home Turkish market, reporting 4% growth in the year. Turkey was shown to be a favourable market for Diageo, despite some volatility in other areas of Europe, most notably Russia.

7. Tanqueray

Change: +5%

Of all Diageo’s “Global Giants”, including Johnnie Walker, Smirnoff and Captain Morgan, Tanqueray is the only brand to record growth in the year. With a 5% organic net sales increase, the gin experienced something of a renaissance when it revealed a new Art Deco style bottle design featuring a lemon juicer shape at its base. It also benefited from increased visibility in the on-trade and the new Tonight We Tanqueray campaign. The super-premium brand extension Tanqueray No Ten, meanwhile, witnessed double-digit growth.

6. Ciroc

Change: +6%

Moving into Diageo’s Reserve Brands, where the group saw the highest concentration of growth, Ciroc posted an impressive 6% sales increase. The brand continued to expand its footprint outside North America with strong growth in Western Europe, particularly the UK, where it is now the number two ultra-premium vodka. The brand’s new pineapple-flavoured bottling helped it further growth in its focal US market. Ciroc launched a number of innovative marketing activations, such as the #MyArrival campaign.

5. Crown Royal

Change: +12%

One of the surprise spirits success stories of the year was undoubtedly Crown Royal’s apple-flavoured brand extension Regal Apple. Launched in November 2014, the bottling is already nearing one million case sales, according to Diageo’s CEO Ivan Menezes, despite its limited availability to the US and Canada. The success of this single flavour extension has boosted the entire performance of the Crown Royal label.

4. Don Julio

Change: +12%

Diageo made headlines earlier this year when it sold its Bushmills Irish whiskey brand to Jose Cuervo in order to acquire the remaining 50% stake in Don Julio Tequila which it did not already own. The acquisition demonstrated Diageo’s faith in the high end Tequila industry, even at the expense of losing its only presence in the fast growing Irish whiskey category. On an organic basis, the brand grew net sales by 12%, but on an reported basis – including the volume impact of the acquisition – the brand soared by 43%.

3. Reserve Scotch malts

Change: +16%

Diageo’s Scotch whisky Reserve Brands portfolio, which includes The Singleton, Haig Club, is the third best-selling constituent in the group’s stable in 2014/15. Diageo said that while The Singleton was the fastest growing of the top five global single malt whisky brands last year, Haig Club continued a successful roll out. Reserve brands represent 13% of Diageo’s net sales, and the portfolio managed to avoid some of the downfalls experienced by its stablemates since “the wealthy consumer base that underpins Reserve is more resilient”.

2. Bulleit Bourbon

Change: +38%

Also part of the Reserve Brands portfolio, Bulleit Bourbon grew sales by a staggering 38% in 2014/15, benefiting from “high advocacy amongst the bartender community”. Diageo has thrown its weight behind the fast-growing American whiskey category by investing US$115m in building a new distillery in Kentucky to increase production of the Bulleit Bourbon brand. Scheduled to be complete in 2016, the new distillery will have a greater impact on Diageo’s results in 2016/17.

1. Shui Jing Fang

Change: +235%

Following an enormous 78% downturn in sales in 2013/14 and a subsequent £264m value write down, super-premium baijiu brand Shui Jing Fang celebrated a return to profitability with a huge 235% increase in sales. Diageo attributed the success of the brand to “innovation, a strengthened route to the consumer, and a soft prior year comparable”. CEO Ivan Menezes said the brand managed to claw back into growth with the launch of a new cheaper bottling and by “shifting the focus away from institutional sales to create a private consumption franchise”.