Spirits Growth Slows as Diageo Loses Market Share, But Long-Term Potential Still Bright for Industry Leader
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Recent industry numbers indicate slowing spirits market growth and some trading down to cheaper brands. Pernod Ricard and LVMH results reflect this trend.
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Diageo is losing market share, down about 1 point over last year. Growth is in areas like tequila where Diageo is less positioned.
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Asia growth expectations may be too high given economic conditions in China. Longer-term risk of changing consumer tastes away from spirits.
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Despite risks, Diageo diversified across liquor types and can acquire brands. Expect 4-5% long-term revenue growth.
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With valuations still reasonable, Diageo worth considering but some near-term risks around depletions and inventory issues.