VIEW FROM THE TOP
SPIRITS MARKET AN ATTRACTIVE OPPORTUNITY ERIK SEIERSEN Managing Director of Diageo Mexico
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Q: Diageo has been in Mexico for more than two decades.
acquired Tequila Don Julio and committed to increasing
How is the company positioned for growth?
advertising and promotional spending on the brand to
A: Mexico is among the 10 most important markets for the
further build its global presence and also to expand bottling
company. We have seven of our top 20 brands here and we
and water treatment facilities in Mexico, among other
have achieved the leading position in the industry thanks
activities. This plan, together with the acquisition costs of
to our whiskey brands and variants and the acquisition of
Tequila Don Julio, will bring Diageo’s expected investment
Don Julio in 2015. Our best-selling products are Johnnie
in Mexico to around US$400 million over five years. We
Walker Red Label, Johnnie Walker Black Label, Buchanan’s
also recently announced the acquisition of Casamigos, an
12 and Tequila Don Julio 70, but we have other popular
ultra-premium tequila that has been very successful in the
brands such as Zacapa, Captain Morgan, Tanqueray, Black
US. We are always looking for opportunities that strengthen
& White, Smirnoff, Ciroc, Ketel One and Baileys. We hold
our portfolio, either through acquisitions or by innovating
a leading market share in value of 30.7 percent in the on
with our brands to make sure we surprise consumers and
trade and 28.5 percent in the off trade. The spirits category
remain ahead of trends.
in Mexico represents an attractive opportunity and Diageo is well-positioned to capture this potential.
Q: What is Diageo’s role to address the market for illicit alcohol in the country?
Q: How has Diageo’s strategy to position the brand in the
A: According to studies, illicit trade in spirits in Mexico is
country evolved?
36 percent. As president of the Spirits and Wine Industry
A: Diageo is building a reputation as one of the best
Commission (CIVyL) in Mexico, we have led initiatives to
performing, most trusted and respected consumer products
address illicit trade and reduce it to OECD levels. Within
companies in the world. Regarding our brand portfolio, we are
this context, recently the federal tax revenue and consumer
prepared to be ahead of market trends. For example, whiskey
protection agencies and CIVyL, along with trade associations
has become an attractive product for Mexican consumers due
representing modern trade, wholesalers, restaurants and
to its good quality and internationality. The tequila market has
small businesses, signed a “Pact for Formality,” which is
also evolved and the consumer is now turning to premium
meant to address illegality and tax evasion in our industry.
products. In general, Mexico is becoming more formal, people have more purchasing power and seek quality; our brands
Q: How does Diageo contribute to the promotion of
offer this quality in different categories and products. We
responsible drinking?
are building a portfolio that has breadth and depth across
A: Diageo also has a leading role regarding responsible
categories and price points, and the correct distribution to
drinking in the country. Its program Actuando Mejor (Model
allow us to meet consumer demand for a range of products,
Cities) aims to improve the ways in which alcohol is sold
from standard scotch to super-premium tequila.
and consumed in Mexico. The program has reached more than 118 million people through campaigns, training and law
Q: What role do acquisitions play in Diageo’s strategy?
enforcement to reduce underage drinking, binge drinking
A: At the global level, we are always looking for fast-
and drinking and driving. Recently, Actuando Mejor has
integration acquisitions with growing brands. In 2015, Diageo
focused on reducing underage drinking by training people who sell alcohol and partnering with the Education Ministry of Queretaro to provide information to students about the
Diageo is a British alcoholic beverages company. Diageo’s
dangers of underage drinking and how to make healthy
brands include Johnnie Walker, Buchanan’s, Baileys, Tanqueray,
lifestyle choices. Police officers in 113 cities have received
Smirnoff and Guinness. In 2015, the company bought tequila
training through the program to help prevent alcohol-
maker Don Julio and established a bottling plant for exports
related car accidents.
