Tuesday, August 20, 2013

Diageo Sustains Dominance in the Market with Its Green Advocacy

Diageo, the world's leader in the premium drinks industry, based in the United Kingdom, continues to dominate the world market in “celebrating life everyday, everywhere.” Established only in 1997, it has built an enviable business empire, and analysts say that Diageo has sustainable competitive advantage over its peers.

Analysts believe that Diageo's unmatched portfolio of spirits combined with its vast distribution network, including thousands of dedicated sales people in the US, would be very difficult and expensive for any competitor to duplicate. The company is making investments to grow its book of business in emerging markets such as India and China.

In the opinion of analysts, these competitive advantages and growth prospects justify an earnings valuation above the market average.

More than that, however, bioenergy technology is helping drive long-term growth. Renewable energy is playing an increasingly important role in Diageo's efforts to curb emissions, specifically the £17m bioenergy plant at the Roseisle Scotch whisky distillery in Speyside, Scotland, which won the award for Renewable Energy Project of the year at the 2013 BusinessGreen Leaders Awards last month.

The innovative plant combines a range of clean technologies, including anaerobic digestion to convert the draff and pot ale by-products into methane, which is fed into a biomass boiler, and clean water, which can be used for the malting process. Waste heat from the distilling process is also pumped to Diageo's Burghead maltings plant next door for reuse.

Diageo is now poised to open a giant £65m bioenergy plant at the Cameronbridge distillery in Scotland later this year, which will reduce total company CO2 emissions by more than five per cent by the end of 2014. Meanwhile, another bioenergy plant has also been opened at Diageo's St Croix rum distillery in the US Virgin Islands, and further projects are in the pipeline.


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