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Diageo sales soar in full-year 2022 results

Johnnie Walker owner Diageo has reported double-digit net sales growth for fiscal 2022, driven by super-premium-plus brands.

Johnnie Walker whisky portfolio
Johnnie Walker net sales grew by 23% in North America

Diageo saw net sales increase by 21.4% in the year ending 30 June 2022, bolstered by the reopening of the on-trade. Reported net sales grew to £15.5 billion (US$18.8bn).

In terms of the company’s spirits portfolio alone, sales were up by 21% compared with the 2021 financial year.

Scotch, Tequila, vodka, gin and Chinese white spirits spearheaded the growth.

Premium-plus brands contributed 57% of reported net sales.

Scotch rose by 29%, led by a 34% surge Johnnie Walker sales. The blended Scotch whisky brand topped 21 million cases for the first time.

Tequila grew by 55%, as Don Julio and Casamigos (The Supreme Brand Champion 2022) increased their share in the fast-growing category within the US spirits market.

Vodka also had a solid 12 months, reporting double-digit growth (11%). The category grew in all regions, particularly Europe. Smirnoff and Ketel One both grew by double digits.

Gin was also on the up (18%), led by double-digit growth from Tanqueray and Gordon’s.

Ready-to-drink (RTD) options also performed strongly, reporting an 18% increase in sales.

Chief executive Ivan Menezes said: “I am very pleased with our fiscal 22 results. We delivered double-digit organic net sales growth across all regions and we gained or held off-trade market share in over 85% of our total net sales value in measured markets.

““I am particularly proud of the performance of Johnnie Walker, which delivered double-digit growth across all regions to surpass 21 million cases globally. This fantastic milestone exemplifies our world-class brand-building and execution capabilities.”

Global market performance

Diageo experienced double-digit net sales growth across all regions.

In North America, reported net sales for spirits grew by 18% to reflect the recovery of the on-trade channel and continued consumer interest in the off-trade.

Spirits net sales grew by 24% in Europe, thanks to particularly strong on-trade recovery in Ireland, Great Britain and Southern Europe. There was broad-based growth across Scotch, vodka, Baileys, gin, rum and raki.

In Asia Pacific, Scotch, Chinese white spirits and IMFL whisky contributed to a 17% increase in spirits net sales.

Africa also enjoyed double-digit growth, with spirits net sales up by 21% thank to both mainstream and international brands – particularly Scotch, gin and vodka.

Meanwhile, in Latin America and the Caribbean, spirits sales soared by 45%. This was largely due to double-digit Scotch growth, and strong growth across other categories, primarily Tequila and gin.

Following an announcement in March 2022 to suspend exports to and sales in Russia, net sales in Russia declined in fiscal 2022. Diageo announced in June that it would wind down its operations in Russia over the following six months.

However, net sales in Eastern Europe as a whole saw an upswing of 18%, a reflection of the continued momentum in the off-trade and recovery in the on-trade.

Travel Retail Asia and Middle East net sales grew by triple digits, following a significant decline in fiscal 21. This reflects a partial recovery as international travel restrictions eased and was primarily driven by Johnnie Walker.

Future growth

Looking ahead to fiscal 2023, Menezes expects the operating environment to be challenging, due to the “ongoing volatility related to Covid-19”, cost inflation, a potential weakening of consumer spending power and “global geopolitical and macroeconomic uncertainty.”

However, he said he was “confident in the resilience of our business and our ability to navigate these headwinds”.

Diageo completed a number of acquisitions in the year ending 30 June 2022, including the acquisition of Casa UM, with the premium artisanal mezcal brand Mezcal Unión; the acquisition of 21 Seeds, to support Diageo’s participation in the super-premium flavoured Tequila segment; and the acquisition of Vivanda, owner of the technology behind ‘What’s your Whisky’ platform.

Menezes added: “Despite the challenging environment, we are executing our strategic priorities, including our ambitious 10-year sustainability plan.

“I am confident that we are well-positioned to deliver our medium-term guidance for fiscal 23 to fiscal 25 of organic net sales growth consistently in the range of 5% to 7% and organic operating profit growth sustainably in the range of 6% to 9%.”

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