Johnnie Walker makers Diageo – with massive drinks production in Scotland – have announced a doubling in investment in Guinness 0.0 to meet demand for their zero alcohol stout.

Guinness are one of the main sponsors of the Six Nations Rugby tournament, with Scotland hosting Ireland on Sunday at Murrayfield.  The dark stout is a popular pint with rugby followers. Guinness has enjoyed 17% sale growth, according Diageo’s quarterly results.

Debra Crew, the Chief Executive, and Nik Jhangiani, CFO, reported improved organic sales in the first half of the fiscal year, despite a challenging environment.

Ms Crew said: “Our fiscal 25 first half results marked a return to growth, delivering organic net sales growth of 1% despite a challenging industry backdrop as consumers continue to navigate through inflationary pressures.”

 She said growth in four of the firm’s five regions was supported by market share gains.

“Notably, in North America, we outperformed the market with high quality share growth and positive organic net sales growth, driven by strong execution and momentum in Don Julio and Crown Royal.

“I’m also particularly proud of the performance of our iconic Guinness brand, which delivered double-digit growth for an eighth consecutive half, supported by brand building expertise, innovation and growing global momentum.

The company reported net sales of $10.9 billion declined 0.6% due to unfavourable foreign exchange, partially offset by an increase in organic net sales. Organic net sales returned to growth and increased $101 million or 1.0%, driven by positive price/mix of 1.2pps, partially offset by a 0.2% volume decline. Operating profit have declined by 4.9% and reported operating profit margin declined 132 bps, primarily due to unfavourable foreign exchange.

“While the pace of recovery has been slower in several key markets, we remain confident of favourable long-term industry fundamentals and more importantly in our ability to outperform the market.

Guinness is doing well in all regions, delivering double-digit growth for an eighth consecutive half 

“Spirits remains an attractive sector with a long runway for growth, as we expect to continue to gain share within Total Beverage Alcohol (TBA). Additionally, our investments in digital capabilities, supply chain, and our transformational route-to-market changes will all be supportive in driving long term sustainable growth, and I am pleased that we are already seeing early benefits from changes in our US route-to-market transformation.

Speaking of the news of global tariffs, she said: “Diageo has anticipated and planned for a number of potential scenarios regarding tariffs in recent months. The confirmation at the weekend of the implementation of tariffs in the US, whilst anticipated, could very well impact this building momentum. It also adds further complexity in our ability to provide updated forward guidance given this is a new and dynamic situation.

“We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause, and we will also continue to engage with the US administration on the broader impact that this will have on everyone supporting the US hospitality industry, including consumers, employees, distributors, restaurants, bars and other retail outlets.

Organic operating profit declined by $42 million or 1.2%; organic operating margin declined 69 bps primarily due to continued investment primarily in overheads, partially offset by reduced marketing spend and positive gross margin expansion.

Declared interim dividend of 40.5 cents.

Kenny Kemp, Editor of The Business