Diageo Enhances Whiskey Line-Up - Analyst Blog

Diageo plc's DEO subsidiary House of Haig introduced its latest Haig Club Single Grain Scotch Whiskey in the U.K. Moreover, the leading brewer has decided to rope in soccer player David Beckham and British entrepreneur, Simon Fuller, to add celebrity power to the innovation.

Haig Club, to be launched in late 2014, has been developed by the House of Haig. It has been prepared by three types of grain whiskey and combines the taste of butter scotch and toffee. The whiskey has been approved by renowned taster Dave Broom and has been described as a ‘versatile spirit'.

House of Haig, owner of Haig Blended Scotch Whisky and Dimple Scotch Whisky, is Scotland's oldest grain whisky producer. It started operating in 1824 from John Haig's Cameronbridge Distillery.

Diageo is putting a lot of focus on the growing whiskey category. In 2012, it announced plans to invest £1 billion ($1.64 billion) to increase Scotch whisky production by 2017. Diageo is a leader in the whiskey category and strengthens the segment by expanding its existing whiskey production facilities and continuous innovation.

The U.K.-based brewer released the first-half 2014 earnings in Jan 2014. Earnings went up 4% year over year on a local currency basis to 62.6 pence (99.2 cents* per share) from 60.2 pence (95.9 cents** per share).

The increase in profit was the result of strong organic growth of Diageo's strategic brands. Increasing reach to the burgeoning middle class coupled with fast penetration into emerging markets also contributed to the positive results.

The Zacks Rank #2 (Buy) stock is one of the top players in the spirit category. The company also commands a leading position both in the beer and vodka markets with a strong portfolio of globally recognized flagship brands, including Smirnoff, Johnnie Walker, Captain Morgan, Bailey's and Guinness.

Some better-ranked stock in the consumer staples sector worth considering are Supervalu Inc. SVU, Diamond Foods Inc. DMND and Inventure Foods Inc. SNAK. All the stocks carry a Zacks Rank #2 (Buy).

*£1=$1.58444 (average price of the half year ended Dec 31, 2013).

**£1=$1.59292 (average price of the half year ended Dec 31, 2012)