India tops Diageo’s growth markets in H2
India topped global liquor giant Diageo’s growth markets in revenues stakes, the company’s financial numbers for the second half of 2008 show.
By Boby Kurian & Anto Antony, ET Bureau |
BANGALORE/NEW DELHI: India topped global liquor giant Diageo���s growth markets in revenues stakes, the company���s financial numbers for the second half of 2008 show. Diageo India recorded a 42% rise in net sales and 18% growth in unit volumes for the six-month period.
On Thursday, Diageo unveiled India-specific numbers for the first time even though it was limited to suggesting the broad contours of the growth story. The LSE-listed company���s robust India numbers come at a time when it is locked in discussions to buy substantial stake in Vijay Mallya-led United Spirits, possibly leading to a merger of operations with the latter.
Smirnoff, especially the flavoured variants, led the domestic growth surge with net sales moving up by over 18%. An estimated 7-lakh Smirnoff cases ��� Diageo���s largest selling brand in India ��� were sold during 2007, capturing 90% of the premium vodka market in the country.
However, the highlight of the half-yearly performance was the company���s focus on premium branding that led to significantly higher net sales per case. This reflected in 42% net sales growth, exceeding unit growth of 18% during the period. The data suggests that growth in India was ahead of other markets, including Korea (31%) and Nigeria (37%). On a consolidated basis, Diageo reported organic net sales growth of 3% with North America recording a 4% rise and Europe down 3%.
���India���s 42% increase in net sales was probably the highest, but the real story is about building lifestyle liquor assets in an emerging market in a downturn,��� Diageo India MD Asif Adil told ET. ���The investments we have made in the shopping experience (especially in travel and mainstream retail with Johnnie Walker Select stores) and marketing are showing results,��� he added.
The emphasis on super-premium and deluxe brands resulted in Diageo���s reserve range ��� including Johnnie Walker Gold and Blue, Ciroc Vodka and the single malts ��� recording a jump of nearly 200% in net sales. Johnnie Walker Black Label and Red Label reported a 45% rise each, while the portfolio of locally-bottled Scotch whiskies, such as VAT 69 and Black & White, grew by 35-45%.
Diageo has made significant noise in India during the past two years in a bid to boost presence across trade channels for lifestyle drinks. That move may gather momentum if talks with United Spirits fructify. Some analysts, however, have expressed doubts whether Diageo���s focus on super-premium brands would benefit much from United Spirits��� distribution muscle that is focused on the mainstream market.
On Thursday, Diageo unveiled India-specific numbers for the first time even though it was limited to suggesting the broad contours of the growth story. The LSE-listed company���s robust India numbers come at a time when it is locked in discussions to buy substantial stake in Vijay Mallya-led United Spirits, possibly leading to a merger of operations with the latter.
Smirnoff, especially the flavoured variants, led the domestic growth surge with net sales moving up by over 18%. An estimated 7-lakh Smirnoff cases ��� Diageo���s largest selling brand in India ��� were sold during 2007, capturing 90% of the premium vodka market in the country.
However, the highlight of the half-yearly performance was the company���s focus on premium branding that led to significantly higher net sales per case. This reflected in 42% net sales growth, exceeding unit growth of 18% during the period. The data suggests that growth in India was ahead of other markets, including Korea (31%) and Nigeria (37%). On a consolidated basis, Diageo reported organic net sales growth of 3% with North America recording a 4% rise and Europe down 3%.
���India���s 42% increase in net sales was probably the highest, but the real story is about building lifestyle liquor assets in an emerging market in a downturn,��� Diageo India MD Asif Adil told ET. ���The investments we have made in the shopping experience (especially in travel and mainstream retail with Johnnie Walker Select stores) and marketing are showing results,��� he added.
The emphasis on super-premium and deluxe brands resulted in Diageo���s reserve range ��� including Johnnie Walker Gold and Blue, Ciroc Vodka and the single malts ��� recording a jump of nearly 200% in net sales. Johnnie Walker Black Label and Red Label reported a 45% rise each, while the portfolio of locally-bottled Scotch whiskies, such as VAT 69 and Black & White, grew by 35-45%.
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Diageo has made significant noise in India during the past two years in a bid to boost presence across trade channels for lifestyle drinks. That move may gather momentum if talks with United Spirits fructify. Some analysts, however, have expressed doubts whether Diageo���s focus on super-premium brands would benefit much from United Spirits��� distribution muscle that is focused on the mainstream market.
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