Diageo cheers heady growth prospects in PH

Diageo Philippines Managing Director Jon Good

Filipinos are wont to celebrate at the slightest provocation, and that cultural trait brings a quick smile to the face of Diageo Philippines Inc. Managing Director Jon Good.

And why not when more celebrations means more occasions for Filipinos to reach for one or more of the brands distributed by Diageo around the world, with the popular Johnnie Walker line dictating the rapid double-digit growth pace in the Philippines.

“I think the great thing about the Philippines is that the people here love to celebrate and the vision of Diageo globally and certainly here in the Philippines is that we celebrate life every day, everywhere,” Good told the Inquirer in an interview.

“In fact, the name Diageo is actually dia for day in Latin, and geo or land in Greek. So our name actually means every day, everywhere. So we live the values, so to speak,” Good added.

Diageo feels that it is uniquely positioned to have a sizable share of the wallet and stomach of Filipinos because of its large portfolio, and it is bringing in more brands to the country to add to the traditional Johnnie Walker, which remains the strongest among Diageo’s brands in the Philippines.

Diageo is reputedly the world’s leading premium drinks company with a collection of beverage alcohol brands across the spirits, wines and beer categories. These brands include Johnnie Walker, Crown Royal, J&B and Bushmills whiskies, Smirnoff, Cîroc and Ketel One vodkas, Baileys, Captain Morgan, Tanqueray and Guinness.

Diageo is a global company, with its products sold in more than 180 countries.

The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE).

Johnnie Walker currently accounts for about half of Diageo’s sales in the Philippines.

Good says Diageo is excited about growth prospects in the Philippines

Other strong brands in its growing portfolio in the country are Captain Morgan and Smirnoff, although much of the marketing efforts going forward will still revolve around further strengthening the Johnnie Walker brand.

“I think [because of] the equity here. Everyone here loves Johnnie Walker. The Filipinos who are working overseas and have come back are always gifting with Johnnie Walker, so people are exposed to the brand. Let’s say if you are in a celebratory occasion in the Philippines right now, I think Johnnie Walker is the go-to brand,” Good said.

On top of the company’s to-do list to execute its aggressive plans for Johnnie Walker and the different brands in its portfolio is the improvement of its distribution network, both in the “on trade” and “off trade”, so that Filipinos will easily get hold of Diageo’s products.

“Off trade” refers to sales in supermarkets, grocery stores and convenience stores where people go and buy during the day, although they do not necessarily consume the products there.

“On trade,” on the other hand, includes bars and restaurants where people can sit down and enjoy the products on site.

Diageo is likewise expanding its reach to growth areas outside Metro Manila, including North Luzon, the Visayas and Mindanao to take advantage of the favorable demographics.

These include a rapidly emerging middle class, the young population and growing thirst for different kinds of spirits.

With the economy growing and more money getting into Filipinos’ pockets, Good said Diageo was seeing an improved growth potential in the Philippines, anchored on the propensity of Filipinos to celebrate.

“The wonderful thing about this market is the celebratory aspect,” said Good, “The insights that we got here is that consumers are very aspirational. When they celebrate, they like to consume international brands, they like to be seen with globally relevant brands and we have a wonderful portfolio here.”

To push sales and to raise awareness of Diageo’s portfolio, Good said plans were in place to “win everywhere,” and that means being involved in fiestas and other occasions for celebration.

It also means more advertising and product sampling in bars, restaurants and even supermarkets.

To know more about its products, the target consumers must first taste them and see how the quality of Diageo’s products differs from those of other brands.

“Liquid on lips is an important way for people to discover our brands. And in bars when you walk in, and maybe you haven’t tried our particular brand, having someone there to talk you through and help you understand what the brand’s about is very important,” said Good.

“Education is very important, I think. When people want to celebrate with something premium, they want to know something about it, they want to talk to their friends about it. It’s very important that they understand something about the brands. And it’s important to understand that they’re globally relevant,” he added, “I think when people hear that Johnnie Walker is number one, it’s reinforced. You go overseas, you go to any market in the world, and you’ll see Johnnie Walker all over. Smirnoff, as well. You can go anywhere. The United States, obviously, is a big market for us, it’s the number one market, by the way, for Diageo. So you’ll go there you’ll see Ciroc, Smirnoff, Johnnie Walker everywhere. So people come back and go ‘I want to experience that, I want to experience it in my own home.’”

Good said the 85-strong Diageo Philippines organization had never been more excited about operations in the Philippines.

“There’s the simple aspiration in this country to do better and to try something more premium. And I think that is why we’re really excited about the opportunities here,” said Good.

“It’s really more fun in the Philippines,” he added.