Hits and misses for Diageo RTDs

- Last updated on GMT

Related tags: Diageo, Rtd

by The PMA Team Sales of Gordon's Edge, the RTD launched by Diageo last May,have been "disappointing" with 200,000 cases sold in the UK in its first...

by The PMA Team Sales of Gordon's Edge, the RTD launched by Diageo last May,have been "disappointing" with 200,000 cases sold in the UK in its first six months compared to annual sales of 5.5 million cases for its blockbuster RTD Smirnoff Ice. Archers Aqua also fared badly with volume down by 19% on the same period the year before, the company disclosed in its interim results. However, Guinness volume increased by 1% despite a 1% decline in the overall beer category ­ and reversed a 1% decline for the brand in the same period a year before. A spokesman told the Morning Advertiser: "We were never expecting Gordon's Edge to be another Smirnoff Ice but we're getting good results from people who are trying it ­ the challenge is building distribution for it." Archers Aqua is competing in the most "challenging" part of the RTD market with products like Bacardi Breezer and Reef, but the company is still fully behind it and has just launched a new apple flavour, the spokesman added. The company has also increased its on-trade sale team by more than 30% with an extra 100 representatives. Now a total of 450 visit 34,000 pubs, bars and restaurants across the UK a year, compared to 23,000 for the same period the year before. Overall, the company had boosted RTD volume by 4% with Smirnoff Ice sales growing by 7% and now holding 26% market share in the RTD sector. "This performance has been driven by successful renovation through Smirnoff Black Ice," the company stated. Other brands that performed well were Smirnoff Red (volume up 11%), Gordon's Gin (up 6%) and Bailey's (up an impressive 35%). Smirnoff Red saw net sales up 19% as a result of a 6% price rise last September. Blossom Hill Red is now the best-selling wine in the off-trade and had achieved overall volume growth of 10%. The volume of Bell's grew 2%, "supported by the Jools Holland advertising campaign" and strong promotional activity. Overall, the company made a pre-tax loss of £208m after losing £1.4bn on the sale of Burger King. But the company's shares rose because its brands are performing robustly around the world. Battle to block budget impact The increase in duty on RTD products introduced in last April's budget has seen Diageo discounting in the on-trade to produce a broadly neutral effect on price. A spokesman said: "Originally, we passed onthe duty increase but since then, we have been working closely with customers with the aim of keeping RTDs accessible.

Related topics: Ready to Drink

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