Global spirits major Diageo is embarking on a mission to be a top-performing consumer products company in India with sustained double-digit, profitable topline growth and it will rejig its portfolio as part of the exercise, according to a senior company official.
Having been on a ''journey of holistic transformation'' since completing the acquisition of United Spirits Ltd (USL) in 2013, marked by moderate topline growth, Diageo India is now looking forward to the new phase, while also creating an organization of the future, and defining and executing an ambitious role for the company in the society.
''Our mission is to be a top-performing consumer products company in India, delivering sustained double-digit, profitable topline growth, and long-term value to all our stakeholders,'' Diageo India Managing Director & CEO Hina Nagarajan told PTI in an interview.
Elaborating on how the company aims to meet its goal, she said,'' We will deliver our mission through three pillars that form the essence of our strategy -- a reshaping of our portfolio while delivering our guidance of 'mid-to-high teens' margin, creating an organization of the future and defining and executing an ambitious role for Diageo in the society.''
As part of the portfolio rejig, she said the company will accelerate growth in the luxury and premium segment and activate Diageo's global luxury portfolio.
Besides, Nagarajan added,'' We will strengthen play in above prestige (segment) with highly differentiated offerings that speak to new consumer cohorts. We will reshape the value proposition in lower and mid-prestige (segment), investing and premiumising McDowell's No1 and restaging Royal Challenge Whisky to drive growth.'' In terms of the strategic review of its ''popular portfolio'' which was announced earlier this year, she stated,''
We said that we would conclude this exercise by December this year, so we are on track to do that.'' At present the company is exploring various options, including ''extension of the franchise model, selective acceleration of brands, maybe even divestment and even change of the operating model,'' she said adding it would be finalized by December.
As for achieving the second goal of creating a future-ready organization, Nagarajan said Diageo India will leverage digital acceleration, talent, and culture as growth drivers, and drive speed and simplicity within the organization.
On Diageo India's role in the society, she said,'' Our stakeholders are increasingly challenging businesses to show how they make a positive impact across all aspects of society.'' Stating that since the acquisition of USL, Diageo has had a strong track record in sustainability, she said,'' We want to challenge ourselves to go much further now and be more ambitious. We will be driving ESG from grain to glass, moving India to drink better, not more, and leading inclusion and diversity.''
When asked if the integration of USL is complete now and legacy issues have been addressed fully, Nagarajan said,'' I think the integration is over. I can't say all the legacy issues are over there are some which carry on but I think there is enough over now to let us focus on our goal of sustained double-digit growth. So we are on a new phase.''
She further said,'' As we chart out this new phase of growth, we have all the fundamentals now in place to be able to give shape to this new mission.'' In the second quarter ended September 30, 2021, USL posted a consolidated net profit of Rs 286.4 crore as compared to Rs 125.1 crore in the year-ago period. Consolidated revenue from operations was at Rs 8,208.8 crore as against Rs 7,509.4 crore in the same period last fiscal.
In the first half of the fiscal (H1) ended September 30, 2021, it posted a consolidated net profit of Rs 336.7 crore. The company had a net loss of Rs 121.5 crore in the year-ago period. Consolidated revenue from operations also increased to Rs 14,377.3 crore in H1 as against Rs 11,330.1 crore in the same period a year ago.
(With inputs from PTI)
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