Diageo's revenue grows

One of the largest producers of alcoholic beverages in the world - Diageo - presented an update of financial data for the fiscal year 2021. In the announcement on September 28, the company boasted about improving the business situation and increasing revenues, especially in the spirits category.

Diageo sees a sequential improvement, boosted by the recovery in the on-trade segment and continued strong demand in the off-trade channel. The on-trade market is sales from hotels, bars, restaurants etc., while off-trade is sales in grocery stores, supermarkets and specialist stores.

Trade in Europe has recovered in recent months with the easing of the epidemiological restrictions. Diageo also cited good results on the US market, which included, among others, the reopening of restaurants, bars and food outlets in all states. Trade in China also picked up during this period.

But even with the prospect of a pandemic restrictions tightening again, companies in the alcohol industry may be optimistic about the future.

Alcohol consumption outside dining establishments has been increasing since the onset of the coronavirus pandemic and will continue to rise, according to data from Nielsen analyst company. Spirit drinks were the best category, with an increase of 33.5% from the start of the year compared to the same period in 2019.

- Alcohol sales in the off-trade sector have been following stable and somewhat consistent trends since June. Alcohol increased by 18% in channels other than eateries in the last week ending August 22, 2020. Consumers are getting used to the next normal and we expect similar growth trends in the coming weeks - said Danelle Kosmal from Nielsen.

Diageo CEO Ivan Menezes said in a recent statement that the US market was stronger than previously forecasted, reflecting strong consumer demand, especially in the spirits segment.

Source: Fool.com