Diageo shrinks in the world, yet has best year ever in Brazil
Valor Econômico
Influenced by the recovery of the sales of Johnnie Walker whisky and Smirnoff vodka - its two main products in the country - Diageo ended the last half of 2009 with the net earnings in Brazil growing at a two-digit level. "We remained above 10%, which was the result for the whole Latin America", says Alexandre Louro, President of Diageo Brasil, the subsidiary of the world's largest distillery that announced yesterday its overall results of the second half of 2009. Even without disclosing the values the Executive assures: "This was the year in which Diageo gained more market in the three last decades".
Even with the crisis and the increase of the tax burden on distilled beverages in the early 2009, the sales, according to Louro, could recover as of the second quarter and developed well in the last half of the year. "Concerning Vodka, we are growing and we have already recovered the values and the volume we had before the crisis".
Whisky and vodka are the main products of the sales of the company. In the segment of "standard" whisky (or eight years old one), the company reached 63.5% of participation in the sold volume. One year ago, that share amounted to 50.8%. Regarding vodka, the percentage was the largest ever reached by the company, getting to 48.3% in volume and 50.8% in value, in December. As for the sales of the Smirnoff Ice beverage, there was a 15% growth in the half.
"We are already the third biggest world market for vodka inside the company", says Louro. A year ago, Brazil was in fifth place. There was, according to him, an evolution of the national market of the beverage, which grew nearly 3% in volume, but there was also a fall in the sales in Europe and in the United States. Besides the recovery of the economy, Louro attributes the good result of the company to the marketing efforts of Diageo. The recovery in the last half of the year was so good that Diageo even made an acquisition. It purchased, in December, the Daiti saki brand that belonged to the Brazilian Sakura. The company started the sales of Dutch vodka Ketel One last month and it will also bring the Zacapa rum. To promote the new beverages and the current portfolio, this year's investment in marketing will be 30% bigger.