Diageo plc DEO is geared to expand the spirits portfolio and enhance brand equity through innovation.
Recently the U.K.-brewer added a line of Smirnoff spirits — Smirnoff Electric — a high-energy alcoholic beverage crafted especially for the upcoming winter.
The spirit, available in four flavors – Berry, Apple, Mandarin and Guarana, comes in fluorescent-colored bottles that glow in the dark.
To provide a marketing boost to the launch, Diageo has partnered with musicians Kiesza and Djemba Djemba for the global music collaboration #WhatWeBring.
We note that the company wants to focus on its spirits business and has therefore planning to sell off its non-core assets. Recently, the company has decided to sell majority of its U.S. and British wine operations to the Australian company, Treasury Wine Estates. The $552 million deal is expected to close at the end of 2015.
Earlier in July too, Diageo had divested the luxury hotel and golf resort, Gleneagles, located in Scotland, to private equity firm Ennismore Capital, to cut costs and boost profits. The move re-affirmed its plans to focus more on the core spirits business.
Such initiatives are expected to give a boost to the company’s spirits business, which are growing well.
In the recently reported third-quarter fiscal 2015, net revenue declined 0.7% and volume dipped 0.8% year over year.
Currently, Diageo has a Zacks Rank #4 (Sell). Investors interested in the beverage sector may consider Constellation Brands Inc. STZ sporting a Zacks Rank #1 (Strong Buy). A couple of consumer staples stocks worth a look are Tyson Foods Inc. TSN and Dr. Pepper Snapple Inc. DPS carrying a Zacks Rank #2 (Buy).
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