United Spirits FY sales soar 19.5%

Diageo’s Indian arm, United Spirits, saw net sales rise by 19.5% for the year ending 31 March 2023, led by its ‘prestige-and-above’ brands.

Net sales for the 12 months to 31 March reached INR 9.67 crores (US$116.9m) with fourth quarter sales growing by 15.6% to INR 2.49 (US$30m).

The company said sales were driven by the ‘strong premiumisation trend, continued momentum in the off-trade, on-premise recovery, and sustained home consumption trends’.

Hina Nagarajan, CEO and managing director, said: “We have delivered a strong year once again with robust top-line growth and resilient operating margins in an extremely volatile and inflationary environment. As an organisation, we have exhibited tenacity and focus amidst macroeconomic headwinds and regulatory challenges.”

Net sales for the ‘prestige-and-above’ segment grew by 22.8% for the full year, while the ‘popular’ division declined by 0.9%.

“I am pleased with the growth momentum of our innovation and renovation offerings. The stepped-up contribution in growth from the upper and mid-prestige segments lend credence to our portfolio reshape strategy,” Nagarajan said.

The company also recorded an ‘exceptional income’ of INR 171 crores, which was primarily due to the sale of brands within the ‘popular’ portfolio, and offset by charges from the supply agility programme and legal entity closure expenses.

In May 2022, United Spirits agreed to offload 32 brands to Inbrew Beverages for approximately US$105.7m.

Nagarajan said the sales increase “comes on the back of the successful closure of the slump sale and franchising of the strategically reviewed popular portfolio during the year”.

She added that the supply chain agility programme revealed during the third quarter is “progressing well”.

Furthermore, the company said its Alwar distillery in Rajasthan has became the first Asian spirits distillery to be awarded the Alliance for Water (AWS) certification.

Nagarajan added: “Looking ahead, our core focus remains on continuing the growth momentum, while being more agile as an organisation, with [a] simplified supply chain and legal entity footprint. We continue to remain committed to our consumer-focused future-back strategy, to consistently deliver value to all our stakeholders.”

The spirits market in India is expected to grow by double digits in 2022, driven by premium and super-premium segments, according to Global Data.