British drinkers are swapping the classic G&T for more exotic cocktails as the gin craze finally comes to an end, the boss of Diageo said today.
The Guinness, Johnnie Walker whisky and Smirnoff vodka owner posted an 18.4% rise in reported net sales to £9.4 billion in the six months to the end of 2022, with organic growth of 9.7%.
But net sales of its leading premium gin brand Tanqueray declined, Diageo said, while sales of Gordon’s grew in every part of the world except Europe.
In the UK growth in vodka “was more than offset by the decline in gin.”
A slowdown in demand for gin would appear to have been matched with a decline in tonic sales. Premium tonic and mixers maker Fevertree today said sales in 2022 were down 2% in the UK to £118 million.
Nuno Teles, managing director of Diageo GB, said: “There’s a normalisation of the business.
“Gin was very much the go-to drink of 11.5 million adults, but now we see them spreading their attention into cocktails and other categories.
“When consumers go out they want to celebrate – there is something of a 90s cocktail revival.”
That revival has helped sales of Smirnoff vodka, Teles said, with the spirit used as a base for around 6 in 10 cocktails sold.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: “It’s glass half empty time for Diageo, which poured out some resilient results showing a surge in super-premium brand drinks, but disappointed in its outlook for the all-important American market.
“Investors eyed up the lack of cheer ahead as Americans tighten their belts amid the downturn.”
The London-based firm sounded a more upbeat note in relation to sales of Guinness, which it said had become the most popular beer in British pubs, responsible for at least one in nine of every pint sold in the UK.
Teles said Diageo was poised to begin construction on its £73 million Covent Garden microbrewery, set to open in a year’s time, while recruitment for 150 new jobs at the site would soon be underway.
