Diageo executive Randy Millian is proud of the fact that eight out of every 12 times someone pours a standard or premium whiskey in the Latin American and Caribbean region, they’re drinking one of his company’s brands.
That kind of dominance is why the spirits giant is bullish on its future in Latin America, which recently has been the fastest growing region for Diageo worldwide. In 2012, the Latin America and Caribbean region represented 12 percent of Diageo’s net worldwide sales and 11 percent of the company’s operating profit. Diageo hopes Brazil will become one of its top three markets by 2017, behind the U.S. and the United Kingdom.
But getting there hasn’t been easy. During periods of economic and political unrest in the region over the last decade, there were times when it would have been more profitable for Diageo to pull back, said Millian, president of Diageo Latin America and the Caribbean. Yet, the company focused on growing its scotch business across the region and it paid off. Over the last eight years, Diageo has increased sales more than two and a half times and almost tripled its operating profit.
“I believed it would get good,” said Millian, who supervises more than 3,000 employees across the region and 119 in Miami. “But I’m not sure I realized it would get this good.”
Millian has been running the region out of Diageo’s Miami office for more than a decade. But he’s also no stranger to this part of the world. He first lived in Argentina as a child and during his career has done stints in Venezuela, Brazil, Mexico and Costa Rica.
The Miami Herald sat down with Millian during a media day, which was part of a Diageo investor conference in Miami spotlighting the success in the Latin American and Caribbean region. Here is some of what Millian had to say:
Q. Has your growth over the last decade been comparable to Diageo’s growth around the world?
We would definitely be in the top positions in the league within Diageo. That’s one of the reasons they’re focusing on us. Like many corporations, the emerging markets have a huge potential for growth. I’m including Asia-Pacific, Africa and Latin America. We are seeing higher growth rates than we are seeing in the developed world, especially Europe. Although the U.S. is starting to come back, the growth rates in the emerging markets are significantly higher.
Q. What is driving the growth Diageo is experiencing in Latin America?
The improved demographics. You now have over 50 percent of the population who is middle class. You have had an increase in spending. Not only are there more people in the middle class, but you have more people in the (upper) class. We expect over the next year to have 60 million more people in the (upper) class. They’re also learning to spend money in different ways.
Q. In what countries do you see the most growth or most opportunities for future growth? Is Brazil the main focus?
There has been broad growth in Brazil, Colombia, Mexico, Chile and Peru. We have seen it all over, but those would be the ones we’re focusing on. It’s not just Brazil, it’s throughout the region.
Q. Why did you remain committed to this region over years when there was not a lot of growth and there was a lot of political and economic unrest in some countries?
Growing middle class feeds spirits business in Latin America
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Growing middle class feeds spirits business in Latin America
