The Weekly Sip is Food Dive’s column focused on the latest news in the rapidly changing and growing beverage sector. From inaugural product lines to big investments and controversial topics, this column aims to quench the thirst for developments in the category.
Diageo earnings fall as consumers cut back on spirits
The maker of Guinness is struggling to manage a cooler purchasing environment as higher-end alcohol falls to the backburner for many consumers.
In its financial results released this week, Diageo reported a 3.6% decline in organic sales, a 5.9% drop in volumes with 2.3% higher prices in its last two quarters. Its overall sales dropped 1.4% from the previous year, netting $20.3 billion. This was the first quarterly decline the company reported since the pandemic began in 2020.
CEO Debra Crew said in the earnings call a “volatile operating environment” contributed to the declines, and that it expects the next fiscal year to continue those challenges. She pointed to consumers being cautious about pricing and high interest rates as contributing factors.
Notably, global sales of higher end spirits suffered the most. Casamigos tequila, co-founded by George Clooney which the brewer purchased in 2017 for $700 million, fell 22% in the last twelve months. Sales of Johnny Walker Whisky saw a 10% drop over the same period.
“We do have to navigate a volatile world, but we are managing this quite closely,” Crew said on the call. “We’ve strengthened our consumer insights, just making sure that we stay as close as possible to the situation so we don’t have any repeat of where we’ve been.”
Crew said the company believes long-term investments in innovation, such as a new Crown Royal whiskey launch this year, and spirits gaining market share over slumping beer and wine stand to benefit the company.
Robert Moskow, an analyst at TD Cowen, said in a statement that a weak consumer environment contributed to Diageo’s woes, and that the company provided “no clear signs of a recovery” to investors.
“The re-acceleration of spirits growth has not been as linear as Diageo anticipated and the consumer environment remains uncertain,” Moskow said.
Producers across the alcohol category are managing an uncertain environment as consumers face sticker shock. The price of alcoholic beverages increased 1.8% over the last twelve months, according to the U.S. Bureau of Labor Statistics’ most recent Consumer Price Index.
— Chris Casey
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Courtesy of Danone
Cool off with International Delight’s ‘Home Alone’ Creamers and Iced Coffee
While temperatures remain hot across much of the U.S., Danone’s International Delight is hoping a little nostalgia will help consumers cool down.
International Delight is teaming up with the film favorite Home Alone to introduce Hot Chocolate Marshmallow Creamer, a hot cocoa-inspired mix with notes of vanilla, milk chocolate and marshmallowy flavor. It joins returning creamer extensions of Frosted Sugar Cookie, Peppermint Mocha and Peppermint Mocha Zero Sugar Creamer, along with Peppermint Mocha Iced Coffee.
The creamer and iced coffee products feature full scene images from Home Alone 1 and 2 to reinforce the fan-favorite holiday movie and coffee experience.
“Teaming up with 20th Century Studios to introduce our Home Alone-inspired creamers and iced coffee adds new flavor to this classic holiday tradition,” Jennifer Michuda, senior director for creamers at Danone North America. “Some presents don’t need to be wrapped, especially when they’re poured in your morning mug.”
International Delight is among the best-selling refrigerated creamers in the U.S. During the 12 week ended April 23, 2023, it recorded sales of $233 million, according to Statista. International Delight was second only to Nestlé $500 million in sales, led by Coffee mate.
As Danone looks to grow the International Delight brand and keep it competitive with Nestlé and other offerings, tying into the nostalgic appeal of Home Alone is likely to capture the attention of consumers who grew up watching the movie as kids more than 30 years ago.
Danone hasn’t shied away from unique, limited-time introductions for International Delight to broaden its appeal. Previously, the French dairy water giant has introduced creamers inspired by ‘90 sitcom Friends, and the prehistoric cartoon family, the Flintstones.
— Christopher Doering
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Courtesy of West End Gin
West End Gin seeks to capture spirit of Louisville
Rooted in the heritage of its founders, A new gin brand from Louisville is aiming to elevate cocktails.
West End Gin launched this week, founded by married couple Dr. Dawn and Stacey Wade, owners of creative marketing agency Nimbus. The duo wanted to create a spirit that reflects the unique Black American history rooted in their home of West Louisville, Kentucky.
The gin is infused with sweet and bitter orange peel — a “hopscotch between a London Dry and a more modern contemporary gin,” according to the press release. It also contains a variety of other botanical ingredients, including juniper, cardamom, grapefruit peel, jasmine and angelica root. The spirit contains 44% alcohol-by-volume.
West End Gin is launching with both its original variety and another, the Rose Ann Edition, which adds notes of rosebud petals and fenugreek, an herb with a taste similar to maple syrup. The spirit is designed to be enjoyed in cocktails like the gin gimlet, which consists of simple syrup and lime juice, according to the brand.
The gin is available exclusively at select liquor stores in the Louisville area.
The Wades self-financed the launch of the gin, and aim to give back by investing $1 from each bottle sold into supporting communities within Louisville and across the country, they said in the press release.
Historically more popular in Europe and the U.K., the stateside presence of gin has grown in recent years through the launch of regional American brands. The spirit in is projected to grow at a compound annual growth rate of 5.4% by 2029, reaching 1.13 billion liters in volume annually, according to Mordor Intelligence.
— Chris Casey
