Trade talk: Paul Walsh
Paul Walsh, chief executive of Diageo, answers questions on key drinks issues.
- Which of your brands would you say are "must haves" for retailers?
I think these days it is a very brave marketer in the retail sector that has "must stock" brands. That is a very arrogant attitude as these brands will no doubt one day get usurped by the new kids on the block. There are very powerful brands but I don't think there is such a thing as a "must stock" brand.
Do you forsee a continuation in the success of your wine business?
I think that growth in the wine category as a whole is going to continue - there is no doubt that it is a very profitable business. However, we are a long, long way from seeing the start of the mega global brands that we have in spirits.
Why?
There has not been great innovation in the wine category, and ironically the public perception is that there has been. But beyond packaging, with the screw cap and bag-in-boxes, there has not been much. I think the power of the wine makers and the vast success of the category has meant there has not been much compulsion on brand owners to innovate. Certainly not to take risks anyway.
Are you happy with the industry's response to the responsible drinking issue?
Can you ever do enough on this issue? However, I feel that the progress we have made as an industry on this topic is hugely impressive. It is only two per cent of our population that abuse our products. I think the news that the trade has elected to stop "all you can drink" promotions and happy hours is very positive.
Where do you see the future of your drinks
business in the next few years?
We are seeing some resurgence in brown spirits, especially whisky. More and more they are being seen as healthy, distinguished and aspirational - especially in the US where they are being embraced by younger consumers.
In terms of geography, the US market is much more positive for us than mainland Europe, which is much trickier.
Can we ever go back to the days of added value in pubs?
No. You will see the market continue to polarise between discounted and aspirational brands. It's not going to be one or the other - you will have both. The fact is there are people out there who will not bat an eyelid at paying £25 for a Martini. But the most important thing as a retailer is to know what you are. Don't get caught in the middle.
Paul Walsh was speaking at the Wine & Spirit Education Trust's annual lecture at the Vintners Hall on June 1.
