Diageo: How Will Its Power Moves in No- and Low-Alcohol Change the Market?

Diageo’s earnings call provides a mixed landscape with regards to its fiscal 2025 results and outlook for fiscal 2026. The key areas of focus revolve mainly around dealing with the current market dynamics in the U.S., reinvigorating growth in Europe, and optimizing global brand performance amid a challenging economic environment. In the U.S., Diageo worked towards normalizing inventory levels during fiscal 2025, which has been largely achieved. However, planning for fiscal 2026 remains cautious, with expectations of a restrained consumer market. The company has underscored its strategy to broaden brand portfolio growth and refine commercial execution, aligning resources to reinforce its market position despite prevailing market pressures. There’s an emphasis on boosting consumer engagement through new product innovations and targeted brand strategies. In Europe, Diageo is doubling down on its investments to combat pressure in the spirits segment. The strategic approach involves a local-focused framework catering to region-specific consumer preferences.