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06/03/2012

Total Guinness Brand Up Double Digits in SIG; Do Pouches Simply Boost Spirits? Oppy

Diageo Guinness USA is a $620 mil co within Diageo North America (approx $5 bil in fiscal 2011), DGUSA prexy Sheila Stanziale told INSIGHTS Spring Conference, with its own P&L. "We sink or swim on our own. We're swimming these days, thankfully," said Sheila. Guinness Black Lager and pouches are among the most successful innovations within all of Diageo North America in last 6 mos. And so DGUSA "is playing an increasingly important role within Diageo North America," said Sheila. Guinness brand up 12% for 52 weeks in Symphony IRI group data. And "every single package within the Guinness brand family is in positive growth mode," she added. Black Lager is "essentially bringing the whole family up, and will "probably" be "close to a million cases," in 8-9 mos.

Good portion of Sheila's remarks dedicated to promoting PABs as way to "keep consumers in our beer space as long as we can before we lose share to spirits." Biggest oppy in pouches, Sheila had said, noting it's gone "from a fledgling category" under $10 mil to $30 mil in sales already "without the benefit of full supply…. I think it's a $100 million category," added Sheila. And it's "found business" for distribs, a "great incremental revenue stream." At Bev Forum, her boss Diageo North America prexy Larry Schwartz, referred to pouches quite differently, as an "alternative to beer." Larry termed pouches another "surprising event," adding it's "a big business already" that's "material even to a company our size" and "as quickly as we can make them" that's how quickly "we sell them." Sheila also praised cocktail-inspired malts (like Smirnoff's Screwdriver) as "good tools to keep our consumers in our beer and malt space a little longer."

Almost all questions directed at Sheila concerned pouches/PABs, including whether she's concerned about being perceived as mktg to underage and whether pouches rep just another stalking horse for spirits. Diageo "has such appropriately strict very tough marketing code" that she's "really not concerned. I feel absolutely terrific about the way we are marketing pouches," she said. "We've been extremely vigilant about the way the product is merchandised." Asked if cocktail-inspired malts or pouches just further spirits brands, she said: "I'm passionate about this one. This could be very controversial…. Even if the big game at Diageo was to launch malt-based pouches to push spirits brands, and I can assure it's not…if I were a beer distributor, I don't know that I'd really care" because it's "all new space" with a "couple of great brands" (Smirnoff, Parrot Bay). With consumers "showing interest in spirits earlier than they did a few years ago, the name of the game is for us to defend and hold on as long as possible." DGUSA $$ sales up 3.5% in SIG 3-channel data YTD thru May 13; pouches would add 4 points to total.

Publishing Info

  • Year: 2012
  • Volume: 43
  • Issue #: 11
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