Diageo has announced it is seeking to buy more premium alcohol brands following its recent acquisitions of Aviation American Gin and Chase Distillery.
CEO Ivan Menezes told CNBC: “The premiumization trend has continued through this period and I’d say that’s the biggest source of value creation for a company like Diageo, people drinking better and trading up.
“We want to keep adding to the growth and margin profile of the business by acquiring fast growing brands with high margins at the premium end of the market … and we’re on the hunt for more. But it is about finding quality brands that we can see growing well over a decade.”
The drinks giant paid around $610million for Aviation, which was part-owned by actor Ryan Reynolds.
Diageo launches 10-year sustainability action plan
Diageo has also announced a range of 25 ambitious goals in its ‘Society 2030: Spirit of Progress’ plan to achieve the United Nations Sustainable Development Goals .
Diageo will focus its action over the next 10 years in three core areas: promoting positive drinking; championing inclusion and diversity; and pioneering grain-to-glass sustainability.
Menzes (above) said: “As a global business, we are committed to playing our part to protect the future of our planet and to leading the way for others to follow. I am immensely proud of Diageo’s sustainability and responsibility achievements to date, and this new, ambitious action plan will challenge us even further to deliver more over the critical decade to 2030.”
By 2030, Diageo aims to reach more than one billion people with messages of moderation from its brands, change the attitudes of five million drivers towards drink driving; and educate over 10 million people on the dangers of drinking underage through ‘SMASHED’, its alcohol education awareness program, now operating in every continent.
Diageo is also setting an ambition to have 45% representation of leaders from ethnically diverse backgrounds by 2030 as well as 50% of all leaders being women; and it will provide skills and training to over 1.7m people to help create an inclusive and thriving hospitality sector.
“By setting both gender and ethnicity goals for the business to achieve by 2030, I believe we can truly break down barriers and help shape a more diverse and successful long-term business and society,” Menzes said.
Focus on sustainability
Diageo has committed to working towards a low-carbon future, harnessing 100% renewable energy to achieve net zero carbon emissions across direct operations and working with suppliers to reduce indirect carbon emissions by 50%.
As the first step in its net zero ambition, Diageo’s Scottish distilleries of Oban and Royal Lochnagar will both become carbon neutral by the end of 2020. Diageo will aim to achieve net zero in India by 2025; and by 2030 ensure that every drink it produces will take 30% less water to make than it does today and will achieve a net positive water impact in our key water stressed basins and communities.
It will also deliver over 150 community water projects across the world, including providing access to clean water, sanitation and hygiene; and support more than 150,000 smallholder farmers with farming techniques to regenerate the land and build biodiversity.
By 2030 ensure that the business is using 100% recycled content in plastic packaging and that 100% of Diageo’s packaging will be widely recyclable.
Today also sees the launch of Diageo’s ‘Sustainable Solutions, a global platform that will provide non-equity funding to start-up and technology companies in order to develop to help Diageo continue to embed sustainability in its supply chain and brands. Designed to support small companies and entrepreneurs develop and commercialise their innovations, Diageo will share global resources and experience to unlock future potential for both partners.
Ewan Andrew, Chief Sustainability Officer and President, Diageo Supply & Procurement, said: “It is vital that we act now if we want to maintain the wonderful world we all live in. I’m proud that we have already halved our own carbon footprint and that we are going to push ourselves further by becoming carbon neutral by 2030. It feels fitting that we are leading the way with Oban and Royal Lochnagar distilleries, which will both be carbon neutral by the end of the year.”