The consumer trend to premium drinks continued to grow, offering opportunities for Diageo's brand collection

In North America, Diageo again performed strongly against its own business goals and outperformed the market. The consumer trend to premium drinks continued to grow, offering opportunities for Diageo’s brand collection. With increased case sales of 3% and further price increases taken, North America, which comprised 37% of our operating profit, remained an important market for the business.

Brand offerings in North America are managed across all beverage alcohol categories in spirits, beer and wine. Strong marketing programmes and sales execution meant the business grew in nearly every key product category.

As market leader in spirits in the United States, a superior route to market in combination with marketing programmes supporting key brands such as Smirnoff, Johnnie Walker, Crown Royal, Captain Morgan and Tanqueray, helped to maintain this position.

Unique marketing programmes
Johnnie Walker Blue Label made history with the first-ever campaign using contemporary art to reinforce this luxury brand. The centrepiece was the first in a series of works of art featuring Johnnie Walker Blue Label by Warren du Preez and Nick Thornton-Jones, two of Britain’s leading creative artists. These stunning and innovative works of art engaged consumers and challenged them to discern the image; a point that is driven home by the tagline, ‘For those who know what to look for.’

Tanqueray continued to see growth this year despite a declining gin category. This was thanks in large part to consumer connections with programmes like ‘T&T Style Sessions’ and an exciting brand extension, Tanqueray Rangpur. Made with Rangpur limes, it was launched nationally in March 2007 and continued to augment Tanqueray’s position as the best selling imported gin in the United States.

On the digital front, Diageo launched the www.thebar.com in response to consumer queries for recipes. The site provided consumers with information including drink recipes, tips for throwing a party and general advice. The internet’s first virtual bartender, Jack, helped to familiarise visitors with the entire collection of Diageo brands.

US consumers continued to choose imported beer offerings and this trend benefited Guinness, Red Stripe, Harp and Smithwick’s. Performance of Guinness in the overall beer category was strong and Guinness Draught in Bottles realised double-digit growth again this year.

Diageo is always looking for ways to expand its business through breakthrough ideas and innovation in beverage alcohol. The innovation strategy was further extended by taking minority stakes in two small companies, Stirrings and The London Group, creator of Nuvo.

Stirrings is a premium cocktail mixer portfolio. Nuvo is an ultra premium effervescent blend of fine French vodka, French sparkling wine and exotic fruit nectar launched in Miami and New York. With a distinctive bottle and pink colour, Nuvo transcends the liqueur category and addresses the popularity of cocktails, wines and blended liqueurs among women.

Diageo considers investments in companies like these to be a logical extension of its innovation strategy and smart business practice.

Completing thet offerings in total beverage alcohol, Diageo’s wine business continued to perform significantly ahead of a strong wine sector, growing share in the United States. This growth was driven by a focus on local priority brands: Sterling Vintner’s Collection, Edna Valley Vineyard, Chalone Monterey and a new innovation, ‘A’ by Acacia.

Industry recognition
Financial performance of the region is just one way to gauge the health of a business. Another way is recognition by suppliers and the industry, which was again achieved this year. In Canada, Diageo received a record four major awards from its largest customer, including one for responsible drinking. In the United States, the business was recognised for the second consecutive year as large supplier of the year by Cheers! Magazine. Ten brands received recognition for their performance, winning the Hot Brand designation from leading industry information source, Impact Databank, while 12 were recognised by Adams Business Research.

In responsible drinking initiatives, Diageo actively supported the Federal Trade Commission’s ‘We Don’t Serve Teens’ campaign designed to remind adults about the consequences of furnishing alcohol to those under the legal purchase age.

Responsible decision-making among NASCAR fans was also encouraged as the Crown Royal ‘Safe Rides Home’ programme continued in the United States. The programme offers a safe alternative to drinking and driving by providing a free, safe ride home to spectators and fans.

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1. 9% Organic growth in net sales of Crown Royal, driven by increased marketing support
2. Johnnie Walker Blue Label used contemporary art to reinforce the luxury of the brand
3. Diageo won 74 medals at the annual San Francisco World Spirits Competition
4. Consumers continued to respond to José Cuervo Golden Margaritas ready to serve drink
5. Diageo made a minority investment in Nuvo, a new ultra premium effervescent blend of fine French vodka, French sparkling wine and exotic fruit nectar
6. Diageo employees hosted a festive holiday luncheon at an Army Medical Centre
7. Crown Royal ‘Safe Rides Home’ provided rides home for NASCAR fans, promoting responsible decision making and getting home safely