Speyside and Brora distilleries at the heart of global whisky success

A distillery on Speyside and another in Brora have helped to deliver record sales of the world’s favourite whisky.

Drink giant Diageo today reported a 20%-plus jump in total annual sales on the back of strong growth in demand for whisky, tequila and beer.

But the star of the show was Johnnie Walker, the world’s best-selling Scotch, for which sales topped 21 million cases for the first time.

The iconic brand comprises expressions of blended whisky from a string of distilleries.

Four distilleries – Cardhu on Speyside, Clynelish in Brora, Caol Ila on Islay and Glenkinchie in East Lothian – are described by Diageo as representing the “four corners” of Scotland crucial to the art of whisky-blending at the heart of Johnnie Walker.

Ewan Andrew, president global supply chain and procurement, Diageo, said the whole industry was reaping the rewards of strong growth in demand for whisky globally.

Export success is driving investment in capacity across the sector, he added.

Meanwhile, Scottish tourism is getting a boost from recent investment in distillery visitor centres and other major projects.

Mr Andrew said the new Johnny Walker Experience attraction in Edinburgh – the centrepiece of a £185m investment by Diageo in whisky tourism – had got off to a good start in terms of visitor numbers and Tripadvisor feedback since it opened late last year.

Scotch was the biggest contributor to growth for Diageo during the year to June 30.

The company hailed a record year for both Johnnie Walker and its “luxury” whisky portfolio.

Tequila had another “breakout” growth year, led by Casamigos and Don Julio and Diageo said it saw “significant headroom” for future growth in the category.

Beer sales grew by 63% in Europe, driven by Guinness due to on‐trade recovery in Ireland and the UK.

Diageo – whose other whisky brands include Crown Royal, J&B, Buchanan’s and Windsor – posted net sales of £15.5 billion, up by 21.4% from £12.7bn a year earlier.

The company reported strong double-digit growth across all global markets.

Operating profits grew by 18.2% to £4.4bn as price increases and supply productivity savings “more than offset” cost inflation. Pre-tax profits surged to £4.34bn, from £3.7bn previously.

London-based Diageo said it achieved broad-based drink category growth and gained market share.

It also highlighted “strong momentum in creating a diverse and inclusive organisation”.

The firm cited its 44% women and 41% ethically diverse leaders globally – up 2% and 4% respectively year-on-year.

Dividend increase

Diageo increased its recommended final dividend by 5% to 46.82p per share.

In addition, the firm revealed it had completed £3.6bn of share buybacks as part of return of capital programme worth up to £4.5bn.

Shares in the company rose 2.63% to £38.65 following the results announcement.

Chief executive Ivan Menezes said: “We delivered double-digit organic net sales growth across all regions and we gained or held off-trade market share in over 85% of our total net sales value in measured markets.

“We expanded operating margin while increasing marketing investment ahead of net sales growth, and we used our strong cash generation to invest in long-term growth.

Mr Menezes added: “In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams.

“I am particularly proud of the performance of Johnnie Walker, which delivered double-digit growth across all regions to surpass 21 million cases globally. This fantastic milestone exemplifies our world-class brand-building and execution capabilities.

“Looking ahead to fiscal 23, we expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty.

“Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds.”

Diageo’s single malt whisky range includes Caol Ila, Cardhu, Dalwhinnie, Knockando, Lagavulin, Oban, Royal Lochnagar, The Singleton and Talisker.

The group also makes Guinness stout, Smirnoff vodka, Bailey’s liqueur and Captain Morgan rum, among others.