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Diageo

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About Diageo

Diageo's company parties must be the talk of the town. It is the leading premium spirits business in the world by volume, net sales, and operating profit. The company produces and distributes eight of the world's top 20 spirits brands. It is also one of the few international drinks companies that span the entire beverage alcohol market, offering beer, – more... wine, and spirits. Diageo's well-known brands include Smirnoff vodka, Baileys cream liqueur, Johnnie Walker Scotch whisky, José Cuervo tequila, Tanqueray gin, Captain Morgan rum, Guinness beer, and wines from Sterling Vineyards and Beaulieu Vineyard. Its products are sold worldwide.

Diageo owns 100-plus production facilities, including malting, distilleries, breweries, packaging, maturation, vineyards, wineries, and distribution. A Global Supply operation accounts for about 85% of production; the operation is divided among supply branches: Europe, America, Global Beer, and Asia. Remaining production is integrated with distribution activities, mainly in Africa.

Diageo has offices in 80 countries and production facilities in North America, Latin America and Caribbean, Europe, Africa, and the Asia/Pacific region. It sells products in 180 markets in these regions, with subsidiary Diageo North America accounting for about one-third of the sales.

Even with challenging economic conditions at home and abroad, Diageo has something to celebrate. Sales and profits (in pounds) jumped approximately 30% in fiscal 2011 over 2007. Results are driven by a strategic mix of premium global and local brands. Diageo's portfolio of global brands, which are marketed worldwide and show the greatest earnings potential, has grown to 14 labels. During 2011 they generated more than 65% of sales. Local brands (Crown Royal Canadian whiskey in North America, Bundaberg rum in Asia, and Gordon's gin in Europe) hold top positions in the particular market where they are distributed, but have a smaller impact on total performance.

Diageo's geographic presence underpins the success of its premium brand portfolio. Although North American and European sales have remained flat to depressed, as cash-strapped consumers traded down, these regions accounted for a hefty two-thirds of sales in 2011. Developing markets (Africa, Latin America, and Asia) generate the remaining one-third of the company's sales.

Fundamental to its growth strategy, Diageo aims to sell up to 50% of its products to developing markets by 2015. To that end, Diageo has increased its stake in China's leading white spirits maker, Shui Jing Fang, to 53%. Shui Jing Fang produces of the country's most profitable and fastest-growing spirit, Shanghai White vodka. During 2011, Diageo also boosted its interest to 53% in another Chinese white spirits maker, Sichuan Chengdu Quanxing Group. (Quanxing owns roughly 40% of Shui Jing Fang, making Diageo its largest indirect stakeholder.) In Vietnam, Diageo ties up with Hanoi Liquor (Halico), the country's largest domestic branded spirits producer. As with its Chinese interests, Diageo has inched up its control; in mid-2012 its total stake in Halico reached more than 45%.

Elsewhere, in 2011 Diageo took over Mey Içki, one of Turkey's leading vodka producers and the top seller of the country's Raki spirit. Diageo gained a market with a rising middle class. The company reached into Latin America, too, purchasing 50% of Rum Creations Products, which owns the Zacapa rum brand.

Increasingly significant, Diageo's African business generates nearly a third of its global beer sales. (All told, beer sales represent more than 20% of Diageo's sales.) The company operates in Kenya through its 50% subsidiary East African Breweries (EAB). EAB owns Kenya Breweries, which EAB gained full ownership from SABMiller in late 2011. Diageo taps Tanzanian thirst with a 51% stake in Serengeti Breweries (also owned through EAB). Serengeti Breweries claims more than 25% of the Tanzania's branded beer market. Diageo targeted Ethiopia in late 2011 by taking over one of the country's primary brewers, Meta Abo Beer. Diageo's Guinness branded businesses lead in Nigeria and Cameroon.

Declining prices coupled with slow demand in the US and Europe has spurred Diageo to pare down Diageo Chateau & Estate Wines, its US wine division, as well as certain European wine businesses. It axed the Gilbeys wine distribution and wholesale drinks business in Ireland in 2011. The move followed the company's sale of Barton & Guestier wines to France's Castel Freres. In the US, Diageo unloaded about 2,000 acres of its vineyard properties as well as winemaking facilities in California's Napa Valley via a sale-leaseback deal with Realty Income Corporation; Diageo Chateau & Estate Wines continues to manage wine production on the properties. – less

Diageo Employer Reviews

Brand Manager (Johnnie Walker, Smirnoff) (Former Employee), East AfricaMarch 27, 2014
Training/Event Coordinator (Former Employee), Toronto, ONMarch 8, 2013
Bottling line worker, Health and Saftey rep (Current Employee), Amherstburg, ONJanuary 14, 2013
Receptionist (Former Employee), Park Royal Station, ENGSeptember 18, 2014
WELDER/FITTER (Current Employee), glasgowSeptember 16, 2014

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