Shares in the Johnnie Walker drinks giant Diageo slumped today after it reported plunging profits due to Covid-19 closures of bars selling its liquors around the world.
But, while the global picture was gloomy, drinkers in the UK proved more resilient than most, with sales of some liquors booming thanks to Brits’ refusal to give up on gin and tonics and some canny marketing skills from the company.
Across Europe, sales for the past year fell 12% but the UK was down only 4%.
According to UK managing director Dayalan Nayager, it has been Diageo’s hawklike monitoring of online search trends that was the key to its relative success here.
Diageo has a large team of digital marketing specialists who keep a close eye on what consumers are chatting about or searching for online, and early into the lockdown they noticed high numbers of searches for baking luxurious desserts at home.
They tipped off the Baileys liqueurs division, who had already been running campaigns to use the drink in puddings.
Quickly, Diageo pumped out more online recipe tips for such delights as Baileys banoffee pie and Baileys and ice cream milkshakes. The e-commerce team hooked up links from these recipes to retailers so customers could buy all the ingredients from, say, Tesco, at the click of a button.
Bailey’s UK sales rose 7.5% in the year.
Similarly, Diageo's e-commerce team spotted that online hunts for tips on cocktails shot up in the early stages of lockdown, with searches for “cocktail shakers” on Google zooming up sixfold almost overnight.
Cocktails had been a booming trend in bars and pubs (known as the “on” trade) long before lockdown, so when the bars closed, Nayager moved his on-trade team to help the e-commerce unit with advice on the cutting edge cocktails being created by their mixologist clients. Again, they were able to offer recipes and advice leading customers to buy Diageo brands.
So confident was Nayager in the demand for gin-based cocktails that he pressed on with the launch of three new Gordons gin flavours in stores during March and April at the very height of lockdown. Again, they proved a near instant hit, commanding nearly 8% of the UK gin market.
Nayager, who regularly tells his staff “data is at the front of everything”, says: “Why would we go ahead with these big launches at that time? Because of the trends we were seeing online. And, in week one of the launch, Gordons Sicilian Lemon was the number one in Amazon’s alcohol category.”
Diageo was fortunate that, unlike some spirits giants who rely mainly on the on-trade, it sells 60% of its drinks through shops such as Tesco and Sainsbury which pivoted rapidly into online home delivery, making it easy for shoppers to stock up on their Gordons and Smirnoff.
“Britain is cutting edge on e-commerce,” says Nayager. This meant Diageo already had Amazon stores offering advice and recipes for its various brands, which served as good marketing tools to hook in locked down drinkers sitting at home with time on their hands to surf, learn and buy.
It still relies on pubs, bars and hotels for the other 40% of its UK sales, though. Now the lockdowns are being relaxed, Diageo has been working with publicans to capitalise on the cocktail boom in the on-trade as well with the concept of cocktails-on-draft.
Starting with passionfruit martinis and espresso martinis using Smirnoff vodka, and a pink martini with Gordons, it can allow bar staff to serve cocktails with minimal touching of surfaces in these covid-sensitive times. While the concept arrived in Diageo with its takeover of draft cocktails group Tipplesworth in December, covid has accelerated demand from pubs.
“We have about 480 outlets now and there’s a long waiting list,” says Nayager. “It’s ramping up.”
So, while Brits might be notorious for liking a drink, it takes some sophisticated technology to persuade us which one to buy.