Milestones

About Diageo

The company Diageo was created in 1997 as the product of the merger of two well-established drinks companies – Guinness and Grand Metropolitan. Its name was conceived by branding consultancy Wolff Olins as a nod to the Latin words for “day” and “the world” to convey the idea that the company’s products bring joy everywhere, every day.

Diageo is the biggest producer of spirits globally, as well as a leading manufacturer of beers and wines. Its brands include some regulars in the average British drinks cabinet: Johnnie Walker, Smirnoff, Tanqueray, Guinness, Baileys, Bell’s and J&B, to name a few.

Many of these brands were in existence well before 1997. Guinness is perhaps the most notable example. Founded by Arthur Guinness in the 18th century, he had such confidence in his stout’s brand and prospects that he signed a 9000-year lease for a brewery in Dublin in 1759. The J&B whisky range also dates from the 18th century, having been founded in 1749.

At the time of it foundation, Diageo was still operating in the food business, too, owning both Burger King and Pillsbury. However, in 2000, it sold these to focus on its premium drinks brands, as well as divesting itself of other non-core brands such as Croft sherry and Delaforce port.

During the same period, Diageo consolidated its premium drinks positioning with the purchase of various spirit and wine brands from Seagram. The company has continued on the acquisition trail (Turkish spirits producer and distributor Mey Içki in 2011, and Brazilian cachaça brand Ypióca in 2012, for example) as well as broadening its range through innovation.

Last March Diageo announced bold ambitions for innovation to account for 20% of its entire business in five years’ time.

Recent variant launches have included Guinness Golden Ale and Pimm’s Cider Cup. Indeed, Diageo is famous for its relentlessly innovative culture, particularly when it comes to creative thinking in advertising and marketing, winning Campaign’s advertiser of the year accolade in 2014. One reason it received this award is that the company encourages experimentation, with new formats such as short films and more edgy, content-driven approaches, while also remaining faithful to the heritage of its brands. Guinness, in particular, has a long and celebrated tradition of boundary-pushing marketing.

This willingness to experiment and take risks comes from a recognition that marketing as we know it is changing and Diageo needs to change with it. Top marketers speaking out on this topic have made no bones about the fact that they see the future of luxury branding as in the creation of immersive, memorable consumer experiences.

But it’s not always easy for drinks brands to strike the right communicative chord in an increasingly socially responsible environment. Diageo has tried to show its commitment to reducing the ill effects of excessive alcohol consumption through a range of partnerships and campaigns. For instance, it created ‘Join the Pact’ to stop people drinking and driving. It has gathered thousands of signatures from those pledging to do this.

It has also funded the training of 100,000 UK midwives on the subject of foetal alcohol syndrome.

Despite these good intentions, Diageo has also sometimes offended people in the way it has promoted its products. For instance, the ASA ruled against ads for the group’s Smirnoff brand in July last year for insinuating that a successful social occasion was dependent on the presence of alcohol.

Similarly, the year before, its Captain Morgan brand had an ad banned for being said to encourage “daring”, adventurous behaviour as a result of alcohol consumption.

The challenging social and economic conditions for its brands notwithstanding, Diageo chief executive Ivan Menezes remains upbeat and confident that Diageo can hit its target of “mid-single-digit top line growth and 100bps [basis points] of organic operating margin improvement” by the end of 2019.

Recently about Diageo

BUSINESS DETAILS

Lakeside Drive, London NW10 7HQ
www.Diageo.com

KEY PEOPLE

Syl Saller, CMO
Ed Pilkington, head of marketing and innovation for Europe
Joanne Looby, global content creation manager, Guinness
Grainne Wafer, global brand director, Baileys
Julie Bramham, marketing director, Smirnoff and Captain Morgan

MAIN AGENCY ROSTER

Mother
AMV BBDO
72 and Sunny
Adam & Eve/DDB
Geometry Global
RPM
Freud Communications
Clarion Communications