At a press conference this week, drinks giant Diageo revealed a mixed bag of results concerning profits and sales in its wide portfolio of scotch whisky and tequila. But one bright spot, according to CEO Debra Crew, is the low and no-alcohol category of spirits, which is surpassing traditional booze by a wide margin in popularity and profitability.
In addition to scotch distilleries and whiskies like Lagavulin, Talisker, Dalwhinnie, and Oban, Diageo owns major tequila brands Casamigos and Don Julio, flavored rum brand Captain Morgan, Canadian whisky Crown Royal, and Guinness beer. The company also completed the full acquisition of NA brand Ritual Zero Proof last September, a few years after purchasing a minority stake in the company. According to the Spirits Business website, Crew appeared at a press briefing this week and said that Diageo’s non-alcoholic portfolio is up by about 56 percent, far outperforming other sectors of the business. Diageo has a majority stake in NA brand Seedlip as well, but Crew cited Ritual as being the driving force behind the success of this category.
“People want this kind of sophisticated experience, they want to feel like when they’re out that you know you’re still out, but you know you’re also wanting to moderate and so you can switch back and forth,” she said at the press conference, the Spirits Business reports. “And so that’s a big trend for us, and we are absolutely looking at that.”
The NA category is doing better than many other traditional spirits categories at the moment, with recent IWSR data showing an increase in sales volumes in the U.S. by nearly 30 percent from 2023 to 2024, and the potential for even more growth over the next few years. Overall, Crew reported an organic net sales growth of 1 percent for Diageo, despite what she calls a challenging environment, buttressed by the performance of Crown Royal, Don Julio, and Guinness. Tequila, which represents 13 percent of the company’s portfolio, was up by 20 percent. Scotch whisky, on the other hand, is still facing some serious challenges: Diageo’s wide-ranging scotch portfolio was down 20 percent, and even global brand behemoth Johnnie Walker saw a 6 percent decrease in sales.
Regarding President Trump’s potential tariffs, which, as we have covered before, is becoming more of a reality (although there has been a delay for Mexico and Canada), Crew acknowledged that this trend could upend any predictions or positive momentum. “We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause,” she said in a press release, “and we will also continue to engage with the U.S. administration on the broader impact that this will have on everyone supporting the U.S. hospitality industry, including consumers, employees, distributors, restaurants, bars and other retail outlets.”
