Eyes front for drinks giant

Intro: Now two years into his tenure as Diageo NI’s country director, Jorge Lopes has set a focus on growth at the centre of his plans for the regional operation. He’s been talking to Russell Campbell…

While drinks giant, Diageo, continues to face significant challenges in its global business, its burgeoning operations here in Northern Ireland are now in growth mode and its share of the local market is at a level not seen for some years.

It’s a vindication, perhaps, of the fresh approach taken by Jorge Lopes, the Brazilian who arrived two years ago to replace long-serving NI country director, Michael McCann. Since taking up the role, Lopes has adopted a strategic approach that’s heavily focused on engagement with the local trade on the ground and new product innovation.

And those tactics appear to be yielding results. Diageo’s last financial year, which ended in June, was very good for its business in Northern Ireland, says Lopes, and its performance in beers and spirits has been strong alongside a busy innovation pipeline.

That said, the country director doesn’t shy away from the harsh realities either, conceding that last summer’s atrocious weather had combined with an enduringly strong pound to demand a harsh toll on drinks sales generally here. And while Guinness traditionally sells less during the summer months, Lopes admits that returns in the middle of 2015 were “disappointing”.

Outside Northern Ireland, the distributor’s performance on worldwide markets has been lacklustre – in September, Diageo warned that its 2016 profits would likely be around £150m down on the previous year thanks to the impact of adverse exchange rates in emerging markets. Lack of demand in those markets has been an enduring problem for the business – in 2014, a drop of more than £1bn in net worldwide sales was again attributed primarily to poor returns in this area.

Here in Northern Ireland, the company employs around 300 people and operates from three sites – its Baileys manufacturing facility at Mallusk, which accounts for around 70 per cent of worldwide demand for the popular liqueur; its canning and packaging plant at Marshall’s Road in Belfast and its new corporate headquarters at Capital House in the centre of Belfast.

Diageo NI moved its headquarters into Capital House in May after 27 years at its old base on the Boucher Road. There are now around 115 staff based in the centre of Belfast, handling commercial operations for Diageo in Northern Ireland as well as customer service for the entire British Isles and credit management operations across Ireland.

“The move to this new office in the heart of Belfast has just been brilliant for us,” says Lopes. “We came here in May when we moved everything from our old site over the course of one weekend. It’s taken us about six months to properly settle in but I think the move has been really good for us. We are now surrounded by many of our customers, we’re close to the excitement of the city centre and it’s been a real boost for the morale of the team here.”

In fact, the move to Capital House is at the heart of a growth strategy for Diageo’s NI operations:

“Growth is the ambition that we have, it’s the ambition of our leadership team and it remains a challenge for us,” adds Lopes. “When you grow, you can have a more positive impact on society and you can pay your people more so they can help more of your customers. That’s the vision that we have.

“We’re looking towards new categories and new areas for growth and innovation that will make this a reality. What we want is to reach a position where, independent of economic conditions or the value of the pound, we’ll be a growing concern.”

Innovation is a key growth driver and one of the highlights for Diageo in 2015 was the launch of its Hop House 13 lager by the innovative Brewer’s Project at St. James’s Gate. It’s a full-flavoured, doubled-hopped lager that serves well for those hunting a middle ground between traditional lager and craft beers.

And the Brewer’s Project was back in the news in September when it launched Guinness Golden Ale.

Also last year, Diageo’s policy of customer engagement continued. In Derry for example, the company invited all its customers to an afternoon event at which they were able to hear more about Diageo’s vision for some of the categories that they sell. They also learned more about beer matching and beer trends and discussed developments in the premium spirits sector.

Now, the team locally is looking forward to the European Championships in France in June, sponsored by Carlsberg. Northern Ireland will be competing in the tournament for the first time and Diageo will support its customers to enable them to make the best of the opportunity.

In terms of other priorities, growth remains the key objective. The second half of 2015 was “challenging enough”, says Lopes, but continued innovation sets the scene for new activity over the next couple of years:

“We currently have a very strong draft beer business and an opportunity exists to replicate this in packed beer,” says Lopes. “We’re going to be launching Hop House 13 in bottles in February and if we can replicate half the sales there that we have had on draught, then that will be fantastic for us.

“We already do very well in premium spirits, but we want to do even better so we’re going to be driving that growth in 2016 as well.”

It’s now two years since Lopes and his family took up their new life in Belfast and he says that he is constantly amazed by the quality of life available here:

“It’s extraordinary,” he says. “I think that sometimes, the people who live here don’t realise how good it is. The level of education is very high, your healthcare is a lot better than many other places, it’s so easy to get around and there are so many options for entertainment. I’m always recommending this place to the people that I meet.”