Diageo developing wholesale volume

Changes implemented by Diageo have helped its customers in the wholesale channel to outperform the overall Features > Business, according to the director responsible for the channel.

Paul Downing said that a decision to not discount as heavily at Christmas as in the previous year meant overall volume for the business was down 12% compared to the previous year.

But he added: “The real positive is that in the parts of the on-trade, cash and carry and wholesale that I look after, the less aggressive pricing in the multiples meant that we grew volume.”

Looking ahead, Downing said Diageo would be concentrating on getting the right value in the independent channel, and this was demonstrated by the pound;9.99 price-marked packs of Smirnoff, Bell’s and Gordon’s which were being rolled out through the sector.

He said the company was also aware that independent retailers wanted to minimise stock holding so Diageo was investigating whether it could reduce some pack sizes. A trial is currently under way in Booker with Smirnoff Ice packs reduced from 24 down to 12. Downing said that if sales did not suffer the smaller packs would be rolled out throughout the independent sector.

One of the biggest opportunities for the independent sector, said Downing, was the putting leaders on display project. He said: “The tests we have run ourselves have demonstrated anything between 60-80% uplift in terms of sales. It’s not a one size fits all. There are some places where you wouldn’t do it, but there are a lot of others where a little bit extra security will make all the difference.”

He said the trade had been slow to follow up the project and called for an industry wide response.

Downing suggested: “Three or four of the suppliers should come together with some of the wholesale groups and say this is the recommendation and this is how you can go about doing it. Everyone agrees it’s a really good idea, let’s get some scale behind it in 2007.”

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