Diageo on supply chain, Christmas, ecommerce and inflation

Diageo CEO Ivan Menezes

The chief executive of Diageo has described the supply chain as “tight” in the UK, adding that the company is in “pretty good shape” to meet demand.

Speaking at Diageo’s Capital Markets Day, Ivan Menezes said: “In terms of our business in the UK right now, we’re in pretty good shape. I mean, everything is tighter, but I would say we hope to be able to give the country a good Christmas with our brands.”

The company’s CFO, Lavanya Chandrashekar, also addressed the issue of inflation. She said the premiumisation trend, among other things, is helping the company to manage the impact of inflation.

“As our business premiumises and the category premiumises, those premium products have better margins so that’s definitely a tailwind that we have,” she said.

Elsewhere, the company highlighted the increasing importance of ecommerce – both with partner retailers and direct-to-consumer.

Menezes said Diageo is the number one in spirits retail sales on Amazon in Europe.

“In addition to building on our partnerships with e‐retailers and traditional trade channels, we are also developing our own e‐commerce channels,” he said. “In fiscal 21, we launched nine new sites, bringing the total to 28. In our measured markets, including China, the UK and Germany in F21 we grew our spirits e-commerce share by almost two percentage points.”

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