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Diageo’s fastest growing spirits brands 2016/17

Diageo witnessed solid growth across almost every spirit category in 2016/17 – but which of its brands progressed the quickest? The Spirits Business counts down the fastest growing spirits brands from the world’s largest drinks group.

Diageo’s ‘global giants’ enjoyed strong single-digit growth in 2016/17

Last week, Diageo revealed that its organic net sales had risen by 4% to reach £12.1 billion (US$15.8bn), with growth across all key regions.

Its ‘global giants’ ­– Johnnie Walker, Smirnoff, Baileys, Captain Morgan, Tanqueray and Guinness – enjoyed strong single-digit growth, with the exception of Guinness, which remained flat, and Smirnoff, which was down by 1%

However, it was Diageo’s ‘local stars’  and ‘reserve’ brands that enjoyed the most rapid growth in 2016/17, with each categories up by 9% and 7% respectfully.

Across the following pages, we count down Diageo’s fastest-growing brands over the last 12 months, on an organic basis.

5. Crown Royal

Organic net sales: +12%

North American whiskey represents 9% of Diageo’s net sales, and grew by 11% in 2016/17. In North America alone, net sales increased by 13% following the launch of Crown Royal Vanilla and the continued growth of Crown Royal Deluxe and Crown Royal Regal Apple. Within its domestic Canadian market the brand continued to benefit from its ‘We Make Whiskey The Canadian Way’ campaign, designed to highlight the brand’s quality and craftsmanship.

4. Buchanan’s and Black & White

Organic net sales: +16%

Scotch whisky represents 25% of Diageo’s net sales, and was up by 5% with broad based growth across all regions bar Asia Pacfic. However, any negative impact was more than offset by growth driven, in part, by Buchanan’s +16% growth – the brand continued to perform strongly in Latin America and Caribbean and North America throughout the year. Scotch whisky performance was consistently strong across all price segments, with Black & White also up by 16%. In PUB (Paraguay, Uruguay and Brazil) the brand grew by 28%, gaining 11 percentage points share of primary Scotch.

3. Bulleit

Organic net sales: +24%

Bourbon brand Bulleit continued to enjoy strong growth and share gains in 2016/17, posting organic net sales uplift of  +24%. Diageo is fiercely protective of its star brand – last year the firm became embroiled in a trademark spat with Sazerac over the design of liqueur range Dr. McGillicuddy’s, with both parties later agreeing to an out-of-court settlement. More recently, the firm sued Deutsch Family Wine & Spirits over the redesign of Redemption whiskey, claiming the bottle has been “revised to closely mimic” Bulleit. Shortages are unlikely to be an issue for this Bourbon brand – in March this year, Diageo officially opened its US$115 million Bourbon distillery, Kentucky-based Bulleit Distilling Co, which has the capacity to produce 1.8m proof gallons annually.

2. Don Julio

Organic net sales: +25%

The Tequila category represents 2% of Diageo’s net sales and grew by 26% in 2016/17. This performance was driven by continued double digit growth of Don Julio in US Spirits and Mexico; in North America the brand’s net sales shot up by 20%, building on the momentum of the previous year, while in Mexico Don Julio witnessed a whopping +42% growth. The super-premium sector of the category shows no sign of slowing – sales in the US have shot up 706% in US since 2002, Distilled Spirits Council data shows. It will be interesting to see how the brand fares with the addition of new stablemate Casamigos next year.

1. Shui Jing Fang

Organic net sales: +65%

Ultra-premium baijiu Shui Jing Fang was the fastest-growing brand in Diageo’s portfolio in 2016/17, posting an incredible +65% organic gains. Chinese white spirits in Greater China grew by 69% in total, driven by route to consumer initiatives and brand equity investment. Founded in 1408, Shui Jing Fang was China’s first baijiu distillery and has been in continuous operation for more than 600 years. Diageo first acquired a majority stake in the brand back in June 2011, and was granted permission by the Chinese authorities to acquire the remaining 47% stake in the company for £233 million in 2013.

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