Diageo warns of slow recovery

03 November 2009

LONDON: With recovery in Europe and the US likely to remain slow for the forseeable future, Diageo plc chief executive Paul Walsh aims to capitalise on the firm's operations in Latin America, Asia and Africa.

Speaking at the firm's London offices, Walsh said that while markets such as Mexico and Brazil had been "almost business as usual" through the downturn, sales growth had last year stalled in both the US and across Europe.

Although there has been a gradual improvement since April this year, "it's not a snap-back to pre-crisis levels," he said.

"I've been in this business 27 years and never seen anything like it."

The world's largest liquor maker believes that the recession has radically altered consumer attitudes  both to products and marketing campaigns.

"Bling has gone, consumers' views have changed...people will still pay for quality, but ostentatious consumption is gone," Walsh added.

To reflect the change, Diageo has shifted its advertising focus to "play up the legitimate quality credentials of brands, with more talk about authenticity."

The firm's new online campaign for top-seller Smirnoff vodka for example focuses on the story of founder Piotr Smirnov, who escaped the firing squad and fled Moscow for Paris after the Russian Revolution.

Data sourced from Bloomberg; additional content by WARC staff