Rising gin and beer sales – what Diageo's results mean for pubs

By Nicholas Robinson contact

- Last updated on GMT

Alcohol stars: sales of gin and beer are driving up Diageo's sales
Alcohol stars: sales of gin and beer are driving up Diageo's sales

Related tags: Spirits, Beer, Lager, Craft beer

Global spirits and beer giant Diageo, maker of Gordon’s and Guinness, has reported a healthy annual sales increase of 8% in Great Britain, driven by its core beer and gin brands.

Beer sales under the Guinness brand also rose by 8%, driven by “a strong performance of Guinness Draught and Hop House 13 Lager​”, said the behemoth’s general manager for GB, Ireland and France Charles Ireland.

Gin brand Tanqueray doubled net sales and gained 30 basis points in market share in the fastest-growing alcohol category in Western Europe, the company’s preliminary results for the year ending 30 June 2018 showed.

Sales of Diageo’s Scotch brands, which include Johnnie Walker, were up 6% on the previous year. Premium ‘Reserve’ brands, specifically those in the whisky category, delivered double-digit growth.

Vodka brand Smirnoff

However, mainstream vodka brand Smirnoff saw sales decline by 2%.

Ireland said: “We’ve experienced a good year in GB, with net sales increasing 8% and our key brands, including Guinness, Tanqueray and Gordon’s, performing well. Reserve brands delivered double-digit net sales, led by Scotch.

Our view – what does it mean for the pub?

Diageo’s results iterate what is going on in the market – people are drinking less, but better.

The growth of gin sales, particularly flavoured gins, is a real tell that consumers are still buying into the category and are keen to discover new and interesting variants.

Guinness’s growth, driven by Hop House 13, backs analysts’ comments that consumers are delving into more flavourful lagers, but not necessarily venturing too far into craft.

Smirnoff’s sales decline shows that although the vodka category makes up the bulk of spirits sales, consumers are looking for something more exciting.

What does that mean for pubs:

  • Diversify your gin offering by including flavoured variants from mainstream and premium brands, as well as smaller, locally-produced products
  • Give customers beers that are a step up from mainstream lagers that edge into the craft world, but aren’t too challenging
  • Whisky is a category few give time to, but there is a great deal of potential for a considered offer
  • There is still a taste for vodka, but think about shaking your house pour up a little by stocking a more premium brand

“Our gin and beer portfolios in Great Britain performed well during the year, with Guinness delivering net sales growth of 8%, driven by strong performances in Guinness Draught and Hop House 13 Lager.

“In gin, Tanqueray’s popularity continues to grow, gaining share in the category and delivering strong double-digit net sales growth.”

Diageo’s gin portfolio

Innovation within Diageo’s gin portfolio in particular has helped to seed growth, specifically with the launch of Gordon’s Pink Gin last year – playing into a rising demand for fruity alternatives in the category – and with Tanqueray Flor de Sevilla this year.

Ireland continued: “Since January we’ve showcased a host of new campaigns and innovative marketing to reach more consumers.

“In May Gordon’s launched the first ever TV campaign for Gordon’s Pink Gin and in March Guinness hosted its first Open Gate Bar at London Beer Week.”

He continued: “Cîroc also celebrated the arrival of summer by taking over the window display of Selfridges’ flagship Oxford Street store to mark the launch of two, limited-edition designs of Cîroc Summer Colada.”

Related topics: Beer, Spirits & Cocktails

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