Diageo unveils Scotch growth strategy

Diageo has outlined its Scotch category growth strategy at its investor conference in New York.

As part of five “strategic thrusts” Diageo said it would look to the “untapped opportunity” of value brands or what the company calls primary whiskies.

David Gates, head of premium core spirits, said: “While we have a global presence in the segment, we have historically chosen to focus on our more premium offering, in particular when our liquid reserves were more scarce. We see significant opportunities to expand our presence in Primary Scotch globally, to a level more in line with our position in the global scotch category as a whole.”

The company says this segment represents one third of total Scotch globally and is the fastest growing segment in the category. “Not only have we grown value share from 11% to 19% in just two years, but we have delivered the highest gearing of the segment.”

Black & White is the fastest growing brand in the category, growing value by +53% last year (Nielsen/ NISCAM). Diageo says its Black & White results are not coming at the expense of its Red Label business. Red Label grew 6% last year, ahead of the segment despite having 84% share in standard scotch.

Innovation, recruiting members to the category, investing resources into malts and being leaders of quality are all key to Diageo's strategy, Gates said.