{"id":249159,"date":"2024-07-30T09:29:06","date_gmt":"2024-07-30T09:29:06","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/07\/30\/johnnie-walker-maker-diageo-sees-first-sales-drop-since-the-pandemic\/"},"modified":"2025-06-25T17:13:37","modified_gmt":"2025-06-25T17:13:37","slug":"johnnie-walker-maker-diageo-sees-first-sales-drop-since-the-pandemic","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/07\/30\/johnnie-walker-maker-diageo-sees-first-sales-drop-since-the-pandemic\/","title":{"rendered":"Johnnie Walker maker Diageo sees first sales drop since the pandemic"},"content":{"rendered":"

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People aren\u2019t drinking as much as they used to. And no one knows that better than Diageo, the alcohol giant behind Johnnie Walker, Don Julio and Guinness.<\/p>\n

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The London-headquartered company saw its net sales decline for the first time since COVID-19, down 1.4% to $20.3 billion in the 12 months to June compared to the same period a year earlier.\u00a0<\/p>\n

Much of the decline was down to Diageo\u2019s business in Latin America and the Caribbean, where volumes slipped by 21% as the company tried to normalize a pandemic-era inventory glut.\u00a0<\/p>\n

The group has faced pressure as budget-tight consumers switch to cheaper alcohol brands and look away from Diageo\u2019s suite of premium spirits. Diageo\u2019s peers share some of its struggles\u2014for instance, Remy Cointreau, the cognac maker, saw its quarterly sales slip last week<\/a>. LVMH\u2019s wine and spirits business has also struggled to pick its sales up<\/a> in the first half of the year.\u00a0\u00a0\u00a0<\/p>\n

The company issued a profit warning in November<\/a>, anticipating weaker results in the fiscal year\u2019s second half.\u00a0\u00a0<\/p>\n

\u201cInterest rates are high, therefore retailers are also likely to remain cautious. We will stay focused on strengthening the resilience of our business and winning with the consumer,\u201d Diageo\u2019s CEO Debra Crew told reporters during a call on Tuesday. She said that despite pockets of downtrading, the \u201cmerit of our portfolio is that we really do have very broad options for the consumer\u201d in terms of product range and price points.<\/p>\n

Despite the macroeconomic volatility impacting Diageo\u2019s business, some areas of Diageo\u2019s business kept the business humming.\u00a0For instance, in its biggest market\u2014the U.S.\u2014the sales of spirits-based cocktails, such as Ketel One Espresso Martini and Tanqueray Negroni, jumped 15%.\u00a0<\/p>\n

The rise of women Guinness drinkers<\/h2>\n

In Europe, overall net sales grew 3%, thanks to Diageo\u2019s beer stronghold with Guinness. Women have increasingly been choosing Guinness\u2014the brand noted a 27% increase between the last two fiscal years, which has helped boost the stout\u2019s popularity.\u00a0\u00a0\u00a0\u00a0<\/p>\n

\u201cWe believe demographic trends, rising incomes in the developing world, spirits, gaining share from beer and wine and long-term premiumization will drive attractive underlying growth in our industry,\u201d Crew said.\u00a0<\/p>\n

Diageo has also seen key leadership changes in recent months. Long-time CEO Ivan Menezes retired in 2023, while Crew took over. CFO Lavanya Chandrashekhar also announced she would be stepping down earlier this year. Set against these shake-ups, shrinking profits may make it harder to calm investors\u2019 nerves.<\/p>\n

\u201cThe guidance is very vague and won\u2019t help improve sentiment, pointing to a continued challenging consumer environment into FY25 and ongoing pressures on margins,\u201d Bernstein analyst Trevor Stirling said in a note Tuesday.\u00a0<\/p>\n

The London-listed company said it was addressing some of its weaknesses, including strengthening its consumer insights to better grasp how and when drinkers consume different beverages.\u00a0\u00a0<\/p>\n

Diageo expects net sales to increase by 5%-7% in the medium term.\u00a0<\/p>\n

The company\u2019s shares were down 9.4% as of 10 a.m. London time.<\/p>\n<\/div>\n

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