Diageo’s CEO has asserted the corporate has “a chance to get way more for much less” from its promoting and promotional funding, because it seeks to be extra “disciplined” in the way it spends its price range.
The drinks firm, which owns manufacturers together with Johnnie Walker, Guinness and Baileys, reported outcomes for its first quarter ended 30 September 2025 in the present day (6 November).
Diageo’s CEO has asserted the corporate has “a chance to get way more for much less” from its promoting and promotional funding, because it seeks to be extra “disciplined” in the way it spends its price range.
The drinks firm, which owns manufacturers together with Johnnie Walker, Guinness and Baileys, reported outcomes for its first quarter ended 30 September 2025 in the present day (6 November).
Diageo has been dealing with a difficult client setting, one thing that was mirrored in in the present day’s outcomes, by which the corporate reported a year-on-year gross sales decline of two.2% within the quarter. Web gross sales have been $4.88bn within the interval.
Because the spirits market typically faces a troublesome setting and Diageo seems to be to drive future progress, it has launched into a price financial savings programme, of which promoting and promotional spend is a key focus.
“From a greenback spent perspective, we proceed to have a chance to get way more for much less,” CEO Nik Jhangiani instructed traders, talking in regards to the enterprise’s promoting spend.
Effectiveness has lengthy been a central tenet of selling at Diageo. For instance the enterprise has invested in bespoke analytics instruments together with Catalyst, designed to step up its effectivity capabilities.
The enterprise now feels it may go even additional in squeezing extra out of its advertising {dollars} as a part of its “speed up” programme, specifically its focus is on what it calls “growth spend”. That is the portion of promoting and promotional funding that’s spent in growing artistic.
The GB market was cited as one among Diageo’s world markets that’s efficiently driving efficiencies, having lower its growth spend in half. Diageo’s GB advertising crew has additionally lower the variety of companies it really works with by 30%, the corporate’s interim CFO Deirdre Mahlan famous.
AI was highlighted as an enabler of this discount in growth spend. Specifically, how the know-how permits the enterprise to organise information to drive higher analytics. The corporate can be leaning on its present instruments, similar to Catalyst, to get extra out of its advertising spend.
We’re not going to be shy if there’s a purpose to pause in a sure space and are available again after we see that progress coming again.
Nik Jhangiani, Diageo
One other factor highlighted by the enterprise’s management was the way it makes choices, with Jhangiani eager to drive a “one Diageo means” of name constructing, that means that decisions would not be made in market or regional silos.
Jhangiani additionally emphasised that the enterprise would take a extra holistic view of its advertising effectiveness, slightly than simply taking a look at its share of voice.
“I believe for some time, we’ve been centered on one factor of that spend, which is simply the media spend, versus via the road,” he mentioned.
Investing in point-of-scale activations was one instance he gave as an space the place there’s potential for Diageo to extend effectiveness. The Australian enterprise has efficiently stepped up its concentrate on driving effectiveness in its industrial A&P (promoting and promotional) spend, he famous, including that the goal shall be for different world markets to emulate this.
Making decisions
In addition to making certain its promoting price range is working as laborious as doable, Diageo can be wanting on the decisions in makes and selecting to not spend money on some areas.
Talking in September, Jhangiani asserted that Diageo had bought itself into one thing of a “vicious cycle” when it got here to advertising spend, the place it felt prefer it wanted to spend to drive progress, with out essentially realizing that the place it was investing was driving progress.
In the present day, he re-asserted his dedication to being choiceful with promoting spend.
“We’re not going to be shy if there’s a purpose to pause in a sure space and are available again after we see that progress coming again,” Jhangiani mentioned.
Returning to the theme of “industrial A&P” spend, Jhangiani famous that in Australia a few of its retailer help funding had not been producing returns for Diageo, and in some instances not even producing returns for its prospects.
“Is that the most effective and prioritised use of our money, or is there higher solution to reallocate a few of that spend and drop a few of these financial savings to the underside line, however nonetheless be capable to help what we’d want from a buyer activation perspective,” he mentioned.
Regardless of the speak of chopping promoting and promotional spend, Diageo’s interim CEO and CFO have been eager to stress their dedication to investing in model constructing.
Jhangiani asserted that he was centered on each the “short- and long-term returns” of the corporate’s promoting spend and recognised the significance of investing behind manufacturers.
“We’re a branded client items firm, we see the extent of spend that we have to must proceed constructing and defending model fairness as critically necessary,” he mentioned.
