The party might be over, or at least morphing into a more sober event as many of the world’s leading drinks companies are reporting declining sales in their spirits divisions. Constellation Brands, Pernod Ricard, and LVMH have all reported a slump in consumer demand for scotch whisky, Cognac, bourbon, and other spirits, a marked reversal from the boom times during the height of the pandemic (as glib as that might sound, sales skyrocketed when people were staying home). Add Diageo, one of the biggest drinks companies in the world, to the list, and some analysts are even going so far as to predict a corporate takeover or acquisition if this trend continues.
Diageo is based in London, but has operations that virtually span the globe. The company is best known for its most high-profile brands, including Guinness, Tanqueray, and the many scotch distilleries that it owns like Lagavulin, Port Ellen, Talisker, and Mortlach. Diageo’s blended scotch brand Johnnie Walker outsells all of those combined by a wide margin, with high-end expressions like Blue Label at the pinnacle of the portfolio all the way down to the lowly Red Label. Here in the U.S., Bulleit and George Dickel are some of Diageo’s American whiskey assets. And in 2017 George Clooney and his partners sold Casamigos to the company for about a billion dollars, now a part of celebrity tequila lore.
According to the drinks business website Just Drinks, the value of Diageo’s stock has fallen over the past year. The reason for this, according to another article that appeared at the website the Spirits Business, is due to a combination of factors: a downturn in business in the Latin American and Caribbean markets, inflation, higher interest rates, and more sober-curious consumers turning from spirits to other low or no-alcohol options (Diageo does own the NA brand Seedlip, it should be noted). Those headwinds led to Russ Mould, the investment director at British firm AJ Bell to…