Diageo has reported net sales of $US10.9 billion in its results for six months to 31 December 2024, down by -0.6% due to unfavourable foreign exchange, although organic sales returned to 1% growth.

By region, Diageo reported +0.2% sales growth in North America and +0.7% in Europe, with a -2.6% decline in Asia Pacific, influenced by the macroeconomic picture in China. 

Diageo has removed its medium-term guidance due to what it describes as “the current macroeconomic and geopolitical uncertainty in many of our key markets” that is impacting the pace of recovery, including the uncertainty around the Trump administration’s tariffs in the US.

Chief Executive Debra Crew said: “Our fiscal 25 first half results marked a return to growth, delivering organic net sales growth of 1% despite a challenging industry backdrop as consumers continue to navigate through inflationary pressures.

“Growth in four of our five regions was supported by market share gains. Notably, in North America, we outperformed the market with high quality share growth and positive organic net sales growth, driven by strong execution and momentum in Don Julio and Crown Royal.

“While the pace of recovery has been slower in several key markets, we remain confident of favourable long-term industry fundamentals and more importantly in our ability to outperform the market. Spirits remains an attractive sector with a long runway for growth, as we expect to continue to gain share within Total Beverage Alcohol (TBA).

“Additionally, our investments in digital capabilities, supply chain, and our transformational route-to-market changes will all be supportive in driving long term sustainable growth, and I am pleased that we are already seeing early benefits from changes in our US route-to-market transformation. Diageo has anticipated and planned for a number of potential scenarios regarding tariffs in recent months.”

Guinness sales skyrocket

Diageo was bullish in its enthusiasm for its Guinness brand, following widespread rumours that it was considering selling the beer behemoth. 

“I’m particularly proud of the performance of our iconic Guinness brand, which delivered double-digit growth for an eighth consecutive half, supported by brand building expertise, innovation and growing global momentum,” Crew said.

Guinness entered its eighth consecutive half of double-digit growth, delivering 17% organic net
sales growth.

Crew said demand in Great Britain had “surpassed our expectations”, with one in 10 pints sold now being a Guinness.

“And while we are pleased by Guinness’ success in its heartland, with double-digit growth in Europe and
Africa, we are encouraged by its growing global momentum in the rest of the world,” she said.

“Cultural engagement activations like our partnership with the English Premier League and strong social media engagement have driven impressive traction in North America, Australia and Greater China.

In the US, Guinness was the fastest growing major import beer in the on-premise, with distribution expanding well outside of its traditional home in the Irish pubs into casual restaurants, sports bars and neighbourhood bars.

“To meet the continued strong demand for Guinness 0.0, we are doubling our original investment to expand capacity,” Crew said.

“In the half, in Europe, Guinness 0.0 continues its record of almost doubling its top-line growth. Guinness 0.0 now represents 12% of Guinness net sales in Great Britain.”

Plans to reverse sales fall for Casamigos

Tequila showed a mixed bag of results for Diageo: sales of Casamigos tumbled by 21%, while Don Julio soared by 50%.

Diageo said it was making progress on the “turnaround” of Casamigos, which the company purchased from George Clooney and Randy Gerber in 2017 for up to $1 billion. 

Casamigos saw double double-digit growth rates from 2019 to 2022. Crew said demand had outstripped supply, leading to some out of stocks, “which I think competition took advantage of”.

During its results presentation, Diageo said the team’s focus had been on commercial execution and enhancing brand awareness of Casamigos.

“We are encouraged by some of the early signs of success, although it is still early days,” said Crew.

The company will launch a new Casamigos campaign next month.

The Diageo results showed Scotch organic net sales also declined by 5%, largely driven by softer industry performance in North America and Greater China.

Diageo announces US expansion plans

Diageo has revealed plans to open a $US415 million manufacturing and warehousing facility in Montgomery, Alabama, which will be fully operational later this year.

The move is well-timed, following President Trump’s moves to impose tariffs on non-US produced goods.

Diageo CEO noted during the release of the company’s interim results that tariffs could impact sales momentum.

“It also adds further complexity in our ability to provide updated forward guidance given this is a new and dynamic situation,” she said.

“We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause, and we will also continue to engage with the US administration on the broader impact that this will have on everyone supporting the US hospitality industry, including consumers, employees, distributors, restaurants, bars and other retail outlets.”

The 360,000 square foot facility in Alabama will have a multi-million case annual production capacity for Diageo’s beverage alcohol brands.

“We are proud to contribute to the economic development of Montgomery, and deeply grateful to the city, state, and community leaders for their continued support,” said Marsha McIntosh, President of North America Supply at Diageo. 

“The new facility will not only bring our business closer to our customers and distributors in the south, but also enable our broader supply network to operate more efficiently and sustainably. This investment underscores our commitment to building greater resiliency into our supply chain across North America.”

“Diageo’s decision to open a state-of-the-art facility in Montgomery is a testament to Alabama’s ability to attract world-class companies and foster meaningful economic growth,” said Alabama Governor Kay Ivey. “This production and distribution hub not only brings high-quality jobs to our state but also reinforces Alabama’s reputation as a premier location for global investment. We are proud to welcome Diageo to Alabama and look forward to the positive impact this project will have on Montgomery and beyond.”

This project is part of a broader multi-year program across multiple geographies to strengthen the company’s global supply chain by improving its resilience and agility, delivering additional productivity savings and making its operations more sustainable.

Approximately 750 jobs will be created during the construction phase and, once operational, the facility will employ approximately 100 full-time personnel.

“Diageo’s investment in a new production facility is a significant step forward for Montgomery, Montgomery County, and the state, reinforcing our position as a leader in industrial and logistics growth. This new facility will create valuable jobs and further enhance economic opportunities throughout our region,” said Mayor Steven L. Reed of the City of Montgomery. 

“We are proud to work alongside Diageo, the Montgomery Chamber, Montgomery County, and our other partners to ensure the success of this facility and the lasting positive impact it will have on our citizens. This collaboration underscores our shared commitment to building a stronger future for our community.”