History and success of Diageo

The name Diageo has been mentioned several times in previous publications on our website. This is not surprising, given that this British multinational company is the world’s largest beverage producer. The company boasts well-known brands such as Johnnie Walker, Cardhu, and Talisker. It also owns a wide range of other beverage brands, including Moët & Chandon, Baileys, Smirnoff, and the famous Guinness.

Of course, it is interesting to delve deeper into this giant multinational company. After all, the company owns a number of distilleries. Some well-known brands originate from distilleries managed by Diageo. Here are some examples: Cragganmore, Buchanan’s, Caol Ila, Clynelish, Oban, Dalwhinnie, Glenkinchie, Singleton, Knockando, Lagavulin, Oban, Royal Lochnagar, and Bell’s. Quite an impressive list.

The history of Diageo

A relatively young company, it was founded in 1997 and is headquartered in London, England. Diageo was formed as a result of the merger between Guinness and the Grand Metropolitan conglomerate. Diageo quickly became a global player, selling its products in more than 180 countries around the world. It currently employs over 33,000 people and has approximately 80 offices worldwide.

Between 2000 and 2002, the decision was made to no longer focus on markets other than beverages. This led to the sale of brands such as Burger King and Pillsbury. Throughout its short history, the company has acquired numerous other companies and continues to grow. By wisely focusing on economically growing countries, the company aims to secure a bright future for itself. More than 50% of Diageo’s sales today come from emerging markets such as Brazil, India, and China. Asia, in particular, is crucial to Diageo’s success.

In 2015, annual revenue approached £11 trillion, with profits reaching an impressive £2,181 million. For example, Smirnoff, one of the company’s most famous brands, sells 10 bottles per second worldwide. As we discussed in one of our previous blogs, Johnnie Walker is also incredibly popular around the world. Approximately 143.1 million liters of Johnnie Walker whiskey are sold worldwide each year. Not a bad sales figure.

Name Diageo

Incidentally, the name Diageo is a combination of the Latin word “Dies” (day) and the Greek word “Geo” (world). According to its creator, marketing firm Wolff Olins, this emphasized the global distribution of products that are enjoyed every day. That is why the company’s slogan is “Celebrating life, every day, everywhere.”

Business model

Diageo https://znaki.fm/teams/diageo/ is a global leader in the distribution of alcoholic beverages. With a collection of over 200 brands sold in 180 countries, the company is present in every bar. In addition to its distribution channel, it trains 1.7 million bartenders and strives to make its business processes more sustainable. Diageo was created through the merger of Grand Metropolitan and Guinness, two large companies whose brand portfolios complemented each other well. Diageo’s current collection includes well-known brands familiar to many alcohol lovers. Examples include Johnnie Walker, Lagavulin, Ketel One, Bulleit Bourbon, Don Julio, Guinness beer, Tanqueray, and Zacapa.

Long-term growth

Diageo embodies the philosophy of big names. Arthur Guinness advocated optimizing production and focusing on strengths. As a result, the company decided to sell the Burger King fast food chain in 2002 and focus on alcoholic beverages. In 2008, its main Dutch competitor, the Nolet family, entered into a partnership agreement with Diageo. This gave the company exclusive rights to brands such as Ketel One (Een!) and led to further market share growth. In March 2020, sales fell due to the closure of the hospitality industry. The resulting surplus of alcohol found a new purpose – donating hand sanitizers to hospitals. This decline was quickly offset by a sharp increase in consumer sales. This demonstrates that alcohol, a favorite “food,” reaches consumers in any case.