Diageo boss: 'We're restless as hell'

Diageo chief executive Ivan Menezes says the company is ‘restless as hell’ following the release of its annual market report for the year ending 30 June 2017, despite profits growing up to 25%.

The report showed a 25% increase in operating profit (£3.6bn) and a 15% increase in sales profit (£12.1bn) with volumes and net sales also in the plus.

“We have lots of things to work on, we’re restless as hell,” said Menezes.

“My comment on restlessness shows that we have lots of things we want to go after.”


According to Diageo, vodka is its worst performing spirit in the portfolio with a reported net sales movement of plus 10%, which although is an increase, it is nearly half the average for the spirits category combined.

Vodka represents 12% of Diageo’s net sales, a decline of 4% for the year and despite a 22% boost in Africa, the poor performance of Smirnoff in the US and UK led to the overall loss.

Menezes added: “I’d love to see vodka do better in the US and have a continued focus on parts of Asia like Korea. Generally we know the areas where we see room for improvement."


Beer was another category which struggled under the Diageo portfolio. It’s reported net sales movement of only a 2% increase makes it the least improving category in the Diageo portfolio, but Menezes remained positive on the subject.

“Guinness is a good example,” he added. “The returns we get are fantastic so spending more money on it in the UK is something we will do.

“We’re seeing interest in products which have a degree of substance and brands that have a degree of product differentiation, so there is growth. We have certain brands which have hit the sweet spot and are growing fast.

“But the main challenge for beer is the middle of the market in the US, that’s where the big volumetric loss is happening and that’s where spirits have really gained from.”


Tequila has been Diageo’s most improved category with a 43% reported net sales movement in the past year, which partly explains the recent acquisition of George Clooney’s Casamigos tequila Brand for $1bn.

Kathryn Mikells, chief finance officer at Diageo, said: "It’s still a brand which is relatively early on in its development. It’s got to well over 100,000 cases incredibly quickly, and I think this is a tipping point in terms of overall growth.

“Importantly this isn’t a high end tequila, it’s a tequila with a relatively high price point and it has high price margins.

“We hold any acquisition to pretty high standards and we’re confident that this is going to earn good returns for the company and be a beautiful brand for us in the long term.”