Alcohol sales improve with coronavirus restrictions easing at bars, restaurants: Diageo
The world's largest alcohol producer says U.S. booze business 'is performing strongly ahead of our expectations'
Alcohol sales could get a boost from bars reopening and the slow return of happy hours.
After months of dried up booze sales partially as a result of bars closed during the pandemic, spirits giant Diageo, the world’s largest liquor producer, expects sales to improve through the end of the year as more Americans get comfortable eating and drinking out at bars and restaurants.
Young businesswoman and her colleague wearing face masks while raising a glass at the meeting, office friends enjoying drink.
“Our U.S. business is performing strongly and ahead of our expectations, reflecting resilient consumer demand and the spirits category continuing to gain share within the total beverage alcohol market,” Ivan Menezes, Diageo’s chief executive, said Monday.
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Diageo, which owns Johnnie Walker and Smirnoff, among other major brands, said its overall business has improved as coronavirus restrictions have eased globally.
"We continue to expect sequential improvement in organic net sales and operating profit compared to the second half of fiscal 2020. Compared to the first half of fiscal 2020, we still expect lower organic net sales and margin dilution," the company said.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DEO | DIAGEO PLC | 119.62 | +0.26 | +0.22% |
COVID-19 shutdowns worldwide have been a buzzkill for the restaurant and spirits industry. A drinks analysis report from IWSR, which measures drinks data globally, in May predicted double-digit declines for worldwide alcohol consumption and estimated it could take another four years to rebound to pre-pandemic growth. Total global alcohol consumption was led by increases in beer and ready-to-drink products growing by 0.1% in volume and 3.6% in value last year, according to the analysis.
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With bars closed earlier in the year, canned beverages saw an uptick in demand with more consumers imbibing at home and spending their dollars on cheaper brews than they would mixed drinks at a local bar or restaurant.
Between March 7 through June 6, in-store sales of domestic premium light beers such as Bud Light, Miller Lite and Coors Light increased by more than 10% compared with the same time last year, while sales of hard seltzer more than quadrupled, according to Nielsen data.