Why do you recommend this news source? DEO is the largest alcoholic beverage producer and marketer in the world.

Diageo sells a collection of premium alcohol brands in the spirits, wine and beer categories. Diageo does the majority of its business in the developed Western world. North America and Europe have always been Diageo's largest market, but they are relatively stagnant and saturated markets.

As a result, Diageo is now looking at Asia, Africa, and Latin America for growth. They are smaller markets but they are growing at a much faster pace than the west.

In many developing countries such as China and [[[investing in india India]], the middle and upper class is growing, which translates to more customers for Diageo.

In addition, Diageo is spending lots of advertising money in these countries promoting their premium brands.

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As a result, DEO's net income was adversely impacted. North America is Diageo's largest sector.

Despite the weakening US economy, Diageo put the pedal to the metal in advertising, increasing spending in that area. This clearly worked, creating far more brand awareness than in previous periods. The International sector contains all the other countries that Diageo operates in, including those in Africa and Latin America.

Western European and North Americans are consuming less alcohol than they have previously. In America, consumption has been slowing for decades, from 2. The main focus of Diageo's business is on the spirits sector of the market. However, this market has started to decline, and growth in the alcohol business has come from wine and beer. Also, flavored alcohol, vodka in particular, and ready-to-drink beverage's like Diageo's Smirnoff Ice also present growth opportunities.

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Diageo recognizes this trend, and has made a concerted effort to diversify out of simple, traditional spirits. In addition, while the Western world still presents a great value, growth looks to come from the developing world and emerging markets.

The United States is Diageo's largest market. The majority of alcohol drinkers in America are part of the [[Aging Baby Boomers baby boomer]generation. This generation is reaching their peak alcohol drinking age, and have plenty of disposable income.

It is believed that the baby boomer trend will continue until around , and will continue to generate profits for the alcohol industry.

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The next generation of alcohol drinkers appears to hold off on alcohol more than their parents. The vast majority of brands in the Diageo portfolio are considered "premium" brands, and they generally cost more than a typical bottle of alcohol.

These more expensive bottles generally carry higher margins than their discount competitors, and have been a great business for Diageo. However, if the economy were to weaken significantly, and disposable incomes dropped, Diageo could be put under some pressure.

A normal consumer on a tight budget, will probably substitute a cheaper bottle of alcohol for the more expensive, brand name Diageo product.

The largest players in the alcohol business are mainly conglomerates that produce and compete in all areas of the business wine, spirits, and beer. In the wine business, Diageo competes with many small wine producers like Willamette Valley Vineyards , as well as larger players like LVMH Moet Hennessy and Constellation Brands. In the beer business, Diageo competes with Anheuser-Busch Companies , Molson Coors Brewing Company , and SABMiller , and, in America, Constellation Brands as well.

Finally, a few competitors in the spirits sector include Constellation again, LVMH Moet Hennessy L. From the makers of. BALANCE INCOME CASH FLOW. Unable to complete your request. Please refresh your browser. See more recent news.

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How To Invest Personal Finance Options Definitions. Contents 1 Company Overview 1. Discount Alcohol 3 Competition 4 References.