We believe in the past year, one in three consumers have purchased some kind of beverage alcohol online, and we can certainly say this has been a big part of our results this year.”Īt the moment, Diageo is the number one supplier to e-commerce booze giant Drizly, and Diageo brands make up five of the top ten spirits brands on the platform. “In February of 2020, you would have seen less than 2% of volumes. “In this industry, e-commerce was quite nascent until Covid-19,” says Crew. Moving forward, continued digital integration is going to be key for Diageo to keep up this momentum. All performed extremely well and certainly played into these results.” In the spirit space, we launched canned cocktails with some of our biggest brands, such as Crown Royal, Tanqueray, and Ketel One. “We found drinkers responded terrifically to some of our biggest innovations, like Bailey’s Deliciously Light and Smirnoff Pink Lemonade. We were not sure what consumers would be up for,” says Crew. “I think at the beginning of Covid-19, we were a little nervous about launching innovation products. The latter is part of a slew of new, innovative products launched during the pandemic. Bailey’s also expanded offerings to include an on-trend almond milk option and a lighter, lower-cal version of the classic liqueur. “With all the home baking this year, Bailey’s was up 31%,” says Crew. That said, Bailey’s still registered strong sales over the last year. “Unfortunately we had to take a fairly significant price increase with our Baileys and Scotch portfolio to cover that tariff.” “It was not-related to the industry-some of our products got caught up in the tariff standoff between Europe and the US,” says Crew.
Over at Bailey's, the price-per-bottle jumped up almost $12 this year due to supply chain issues.
In the tequila category, agave supply has not been able to keep up with demand, leaving brands struggling to find properly ripened agave. One of the largest hurdles Diageo faced over this fiscal year was supply chain. We believe that the future of this RTD area is in better, more convenient cocktails.”ĭiageo is planning an operations facility in Illinois that will specifically support RTD effort-the project includes two high-speed canning lines with the capacity to produce over 25 million cases of RTDs per year. Consumers are looking for more convenience in what they're consuming. “We've been taking our biggest spirit brands and putting them in cocktails. “Part of our largest overall expansion at the moment is a line dedicated to spirit cocktails,” explains Crew. Even that brand has grown 17% this year-it’s a really strong category for us.” “We’ve also technically been in the RTD space for years,” Crew continues. Ketel One has a Botanical Vodka Spritz and Tanqueray offers single-serve gin cocktails. Crown Royal offers a ready-to-drink cocktail line, as does Smirnoff Ice. Over the last two years, Diageo has leaned into crafting canned iterations of best-selling spirits, allowing the spirits giant to play in the fast-growing RTD category. She notes that the shift towards premium brands, “comes from stealing shares from the beer and wine categories.” “Our Scotch portfolio, led by Johnnie Walker, was up 18%, while our biggest brand, Crown Royal, jumped 13%.” In fiscal 21, Diageo’s Reserve portfolio grew 36%, now accounting for 25% of net sales value.
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