Diageo has developed a new global division for its luxury spirits brands and consumer experiences called Diageo Luxury Group.
Under the new division, Diageo will look to build its brands being sold at an RRP of $100 and more.
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Diageo Luxury Group will oversee the company’s Scotch brands Brora and Port Ellen, which both sit in its Rare & Exceptional business unit.
It will look after 15 brand homes and distillery visitor experiences, such as the Johnnie Walker Princes Street site, and oversee the company’s cask ownership programme, Casks of Distinction, which allows consumers to buy individual casks of Scotch from Diageo’s stocks.
Additionally, the division will manage London-based fine wine and spirits retailer Justerini & Brooks.
It aims to also develop “transformational and iconic collaborations” with its “trade partners, brand and innovation pipelines”.
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By GlobalDataWhen asked by Just Drinks why the creation of this new division was of strategic importance, the company said: “Luxury is not a new concept at Diageo but what this luxury division will do is expand and build on years of innovative work in global consumer trends such as premiumisation in spirits, the experience economy and cocktail culture. We are excited by the potential.”
Diageo Luxury Group is being headed up by Julie Bramham, formerly Johnnie Walker’s global brand director.
Bramham, now Diageo Luxury Group’s managing director, said in a statement: “We are privileged to hold Diageo’s finest assets in our possession – a collection of exceptional brands and talented individuals that allow us to combine heritage with a forward-thinking drive.
“Bringing the breadth of our luxury offering together, alongside a focus on an expansion of our luxury-based experiences, has Diageo incredibly well-placed to deliver for our clients and customers.”
The division looks to hone its strategy on “key influential cities” worldwide, such as Singapore and Dubai as well as global travel retail and its Great Britain (GB) market.
Alongside the launch of Diageo Luxury Group, the company’s GB division has also developed the Diageo Luxury Company (DLC) unit, which will sit within the group’s domestic market.
DLC will focus on scaling “locally relevant luxury brand building” and consumer experiences “across the trade”, the company said. The unit hones in on brands with “a broader price point” from £30 ($38.40) and above, such as Don Julio Tequila, Johnnie Walker Scotch and Cîroc vodka.
The moves from the Smirnoff vodka owner comes as the group looks to improve its performance following its first annual sales decline since the pandemic.
The Guinness stout brewer booked a 1.4% decline in sales for its 2023/24 fiscal year to $20.27bn. On an organic basis, sales dipped 0.6%.
Group volumes were down 5% on a reported basis and 4% organically, at 230.5m equivalent units.
Reported operating profit increased 8% but slumped 5% organically to $6bn.
In North America, Diageo saw its annual net sales drop 2% on a reported basis to $7.91bn, with volumes down 4%. CEO Debra Crew at the time linked the declines “to a cautious consumer environment and the impact of lapping inventory replenishment in the prior year”.
Speaking to journalists at the company’s London headquarters following the full-year results, Crew said she was hopeful that consumers “will come back as the economy improves”. She added, however, that the higher-priced bottles in the US portfolio “are definitely feeling the pinch”.
