This audio was auto-generated. Please let us know if you have any feedback.
The Weekly Sip is Food Dive’s column focused on breaking news in the fast-changing and growing beverage sector. From first product lines to big investments and controversial topics, this column aims to quench your thirst for developments in the category.
Diageo revenues fall as consumers cut back on alcohol consumption
Guinness makers are struggling to manage a cold purchasing environment as premium spirits become less important to many consumers.
Diageo reported in its financial results this week that organic sales were down 3.6%, volumes were down 5.9% and prices were up 2.3% over the last two quarters. Overall sales were down 1.4% year-on-year to $20.3 billion. It was the first quarterly decline the company has reported since the pandemic began in 2020.
CEO Debra Crew said in an earnings call that a “volatile operating environment” contributed to the decline and that she expects the challenges to continue into the next fiscal year. She cited consumer price wariness and higher interest rates as contributing factors.
In particular, global sales of premium spirits have been hit hardest. Casamigos Tequila, co-founded by George Clooney and acquired for $700 million in 2017, has fallen 22% over the past 12 months. Sales of Johnny Walker Whiskey have fallen 10% over the same period.
“We’re navigating a volatile world, but we’re managing it very closely,” Crew said by phone. “We’ve ramped up our consumer insights and stayed as close to the action as possible to make sure we don’t repeat where we were.”
Crew said he believes long-term investments in innovation, such as the launch of a new Crown Royal whisky this year, and growing share of the mainstream market beyond the stagnant beer and wine markets will benefit the company.
TD Cowen analyst Robert Moscow said in a statement that a weak consumer environment had contributed to Diageo's struggles and that the company had not shown investors “clear signs of recovery.”
“The re-acceleration of spirits growth has not been as linear as Diageo had expected and the consumer environment remains uncertain,” Moscow said.
Producers across the alcohol category are managing an uncertain environment as consumers face sticker shock. According to the most recent Consumer Price Index from the U.S. Bureau of Labor Statistics, prices for alcoholic beverages rose 1.8 percent over the past 12 months.
— Chris Casey
Selected captions
Provided by Danone
Cool off with International Delight's 'Home Alone' Creamer and Iced Coffee
With temperatures still lingering across much of the United States, Danone's International Delight is hoping to help consumers cool down with a little nostalgia.
International Delight has collaborated with the film 'Home Alone' to produce vanilla, milk chocolate and marshmallow like Flavors. Frosted Sugar Cookie, Peppermint Mocha, Peppermint Mocha Zero Sugar Creamer join the creamer expansions and Peppermint Mocha Iced Coffee.
The creamer and iced coffee products feature full-scene images from Home Alone 1 and 2, elevating fan-favorite holiday movies and coffee experiences.
“We’ve teamed up with 20th Century Studios to create a Home Alone-inspired creamer and iced coffee, giving this classic holiday tradition a new twist,” said Jennifer Michuda, senior director of creamers for Danone North America. “Some gifts don’t need wrapping, especially when they’re poured into a morning mug.”
International Delight is one of the best-selling refrigerated creamers in the United States, with sales of $233 million for the 12 weeks ending April 23, 2023, according to Statista. International Delight ranks second, behind Nestlé’s $500 million in sales led by Coffee Mate.
As Danone looks to grow its International Delight brand and remain competitive with the likes of Nestlé, incorporating the nostalgic appeal of Home Alone could appeal to consumers who grew up watching the film as children 30 years ago.
Danone has never been shy about expanding the appeal of International Delight with unique, limited-time launches. Previously, the French dairy giant launched creamers inspired by the 90s sitcom Friends and the prehistoric cartoon family the Flintstones.
— Christopher Dohring
Selected captions
Courtesy of West End Gin
West End Gin seeks to capture the spirit of Louisville.
A new Louisville gin brand rooted in its founders' heritage is aiming to take cocktails to the next level.
West End Gin launched this week and was founded by husband-and-wife team Dr. Dawn and Stacey Wade, owners of creative marketing agency Nimbus. The duo wanted to create a spirit that reflected the unique Black American history rooted in West Louisville, Kentucky..
The gin is infused with sweet and bitter orange peel. According to the press release, it is “a hopscotch of London Dry and a more modern contemporary gin.” It also contains a variety of other botanicals, including juniper, cardamom, grapefruit peel, jasmine, and angelica root. The liquor has an alcohol content of 44%.
West End Gin is releasing the original varietal and another varietal, the Rose Ann Edition, which adds notes of rose petals and fenugreek, an herb with a similar taste to buckwheat syrup. According to the brand, the spirit is designed to be enjoyed in cocktails such as the Gin Zimlet, which is made with simple syrup and lime juice.
Gin is only available at select liquor stores in the Louisville area.
The Wade family self-funded the launch of the gin and plans to give back to the community by investing $1 from every bottle sold to support communities in Louisville and across the country, the release said.
Historically more popular in Europe and the UK, gin’s presence in the US has grown in recent years with the launch of regional American brands. According to Mordor Intelligence, the spirit is expected to grow at a compound annual growth rate of 5.4% to reach 1.13 billion litres per year by 2029.
— Chris Casey
