Guinness – first growth in 6 years

Guinness net sales showed growth for the first time in six years according to David Smith, the Country Director for Diageo Ireland, commenting on Nielsen stats for the year to the end of November 2014 (AC Nielsen’s MAT figures to the end of December are due out next week) which indicated net sales growth of 1% overall.

In the on-trade, share remained flat at 32.7% while brand share grew 1.4% in the off-trade to 8.9%.

“Growth came from increasing focus on execution in the on-trade, the successful ‘Made of More’ campaign and fantastic industry-led campaigns such as ‘Support Your Local’ resulted in overall flat net sales in beer,” he stated.

Globally, Guinness net sales declined 4% driven by a weaker performance in Nigeria, Indonesia and Great Britain due to difficult market conditions and price sensitivity. However, the brand grew in many African markets and in Kenya the brand grew double digit driven by an increased focus on trade visibility. In Asia, expanded distribution and marketing activities drove strong double-digit growth in Korea and Greater China.  Innovation was a key driver of growth and this half saw the launch of Guinness American Blonde Lager in the US, The Brewers Project in the UK and Ireland and Guinness Zero in Indonesia.

In Ireland Baileys sales increased by 1.9% overall but globally net sales declined 5% as the brand entered the year with high stock levels and saw softer depletions in the US, Greater China and Nigeria. In Western Europe, net sales declined 4%. However, in the UK Baileys performed well and net sales were up 2%.

“Brand equity scores remain strong” stated David Smith, “and the launch of the latest campaign ‘Here’s to Us’ celebrating the brilliant spirit of women in Western Europe is expected to lead to improved performance.”

In the spirits category overall spirit sales declined by 1.24 percentage points, he added.

The St James’s Gate Brewery accounts for 35% of global beer for Diageo and brews a billion pints a year of which 75% is exported to over 130 markets worldwide.

The statement from St James’s Gate has been published as Diageo plc published Interim Results for the six months from July to the end of December 2014 showing a 2% organic decline in sales volumes and a net sales decline of 1% to £5.9 billion.

This put net sales for the year to the end of December 2014 at £10.258 billion, down 9% on a reported basis, with organic volumes down 2%.

Operating profits for the six months to the end of the year (Diageo’s H1) were down 11% to £1.7 billion before exceptional items and they were down 20% for the year overall to £2.7 billion.

The annual figures comprise a net sales decline of 10% for spirits as volumes dropped by a per cent, an 8% decline in beer sales reflecting an 11% organic volume decline and a 6% decline in wine sales on the back of a 4% volume decline.

Diageo plc’s Ready-To-Drink sales were down 11% despite an 8% increase in volumes.



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