Targeting Asia is a Whisky Business

Appalling pun, but here is a great case study for students preparing for BUSS4 this week and looking to consolidate notes on the benefits and risks of targeting emerging markets.

Diageo, a producer of whiskys and spirits is investing £1bn to open a new distillery to support it’s growing sales to emerging markets and particularly Asia.

This Independent article gives all the key background, and shows why Diageo is just one of a number of firms to recognise the growing importance of this market. The killer stat here comes from the industry analyst who says “This year we forecast that Scotch consumption in the emerging markets will be greater than in the developed world. This is an important inflection point which highlights the broad-based appeal the product has achieved.”

With Unilever and Reckitt Benckiser also expecting to see the majority of revenues to come from Asia in the next few years and JaguarLandRover now exporting more cars to China than it sells in the UK, emerging markets will remain of key strategic importance to firms seeking scale, efficiency and continued growth in the face of harsh economic conditions in the developed world. The key question is whether growth in the emerging economies will continue as their own exports suffer in the face of reduced demand in the West.