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UK spirits duty hike pressures Diageo and Bacardi; Henkel upgrades revenue target; Kinder and Oreo lead Gen Z snacking awareness in Spain.
The UK Budget just handed Diageo and Bacardi a painful cost shock — and brand managers need to know their three options fast. Plus Henkel proves brand investment pays off, and Gen Z snacking data surprises in Spain.
In this episode:
The FMCG Marketing Daily is a concise briefing for FMCG and CPG marketers, brand managers and CMOs, hosted by Marco & Klara. New episode every day.
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Also from Marco & Klara: The Digital Commerce Daily · The Health Marketing Daily
The essential morning briefing for brand leaders in fast-moving consumer goods. Hosted by Marco and Klara — two senior strategists with decades of experience inside global CPG companies and consultancies. Every episode covers retail media and distribution shifts, brand and competitor moves from Unilever, Coke, Nestlé, and challenger brands, and the macro and regulatory forces reshaping the category. Authoritative. Analytical. No noise. Built for brand managers, trade marketers, CMOs, and agency directors who need to stay ahead.
Marco: Good morning — three stories worth your attention today.
Klara: We do. The UK Budget just handed the drinks industry a nasty surprise on duty — and brands like Diageo are going to have to make some tough calls fast.
Marco: Henkel is quietly proving that betting on your brands actually works. And we've got fresh data on Gen Z snacking in Spain that's directly relevant to Mondelez and Mars.
Klara: Let's get into it.
Marco: The UK government has just handed the wine and spirits industry one of its most painful cost shocks in years.
Klara: To understand why this stings so much, you need to know how duty works. Duty is a tax the government adds to alcohol — it's separate from VAT, and producers have to pay it before a single bottle hits the shelf. The spirits and wine sector was already under pressure. Volumes have been softening since the post-pandemic boom faded, and fewer people are going out to bars and restaurants.
Marco: Now, on top of all that, the UK government has announced a significant increase in duty rates on wine and spirits, coming into force next year. Industry bodies — the people who represent brands like Diageo and Bacardi — have called it "breath-taking." That word choice matters. It signals this isn't a small adjustment. It's a genuine cost burden landing on an industry that is already managing a fragile recovery.
Klara: And here's what every brand manager in this category needs to sit with. You've got three options. Absorb the extra cost, which destroys your margin — that's your profit on each bottle. Pass it on to the consumer by raising prices, which risks losing shoppers to cheaper alternatives. Or lean harder into premium — convince people your product is worth the higher price tag.
Marco: My view is that the brands with real consumer loyalty will use this as cover to raise prices and actually come out fine. Diageo's Johnnie Walker or Tanqueray have that kind of pull. It's the mid-tier brands, the ones without a strong reason to exist in a shopper's mind, that are in real trouble.
Klara: I'd add a note of caution though. Even strong brands have limits. If prices climb too far, shoppers trade down — and duty hikes have a way of accelerating exactly that.
Marco: Worth watching very closely. Now, let's move to our next story.
Marco: Henkel has just raised its full-year sales target — and it's worth understanding what that actually signals.
Klara: To put it in context, Henkel isn't a single-focus company. It runs two quite different businesses side by side — consumer brands like Persil and Schwarzkopf, and industrial adhesives used in everything from cars to electronics. That dual structure has been its safety net during tough periods. And right now, European consumer spending is under real pressure. People are watching what they spend.
Marco: So against that backdrop, Henkel coming out and upgrading its annual revenue guidance after a stronger-than-expected third quarter is genuinely notable. This wasn't a cautious "we'll hold our targets" statement. They moved the number up. That tells you the underlying performance was solid enough that they felt confident making a public commitment to higher growth.
Klara: What I find interesting is the timing. A lot of FMCG companies have been pulling back, trimming forecasts, managing expectations downward. Henkel is moving in the opposite direction. That contrast stands out.
Marco: And for brand managers, that contrast is the whole lesson. Henkel has been consistently investing in its brands — not cutting back when things get difficult. This result looks like proof that staying the course pays off. When you pull marketing spend to protect short-term profit, you often give up the brand strength you need to grow when conditions improve.
Klara: I think that's broadly right, but I'd be careful about reading it as a simple "spend more, win more" story. Henkel also has that adhesives business cushioning the numbers. A pure consumer goods player in the same European conditions might tell a different story.
Marco: A fair qualification. But the direction of travel is clear — brand investment compounding over time beats short-term caution.
Klara: Right, something to bring back to your own budget conversations. Now, on to our next story.
Marco: Seven in ten young Spanish consumers are eating sweet snacks — chocolate and biscuits — every single week.
Klara: To understand why that number matters, you need to know where the industry expected Gen Z to be heading. The health and wellness trend has been building for years. Reduced sugar, better-for-you alternatives, functional snacking — brands have been pouring money into that direction, partly because they assumed younger consumers were moving away from classic indulgence.
Marco: So when a study by Mazinn lands with data showing that 70% of young people in Spain are still reaching for sweet snacks weekly, it reframes the conversation. And it's not just about frequency. The brands winning on awareness — the ones that young people think of first — are Kinder from Ferrero and Oreo from Mondelez. Not some new wellness challenger. The established names.
Klara: That's the reassuring part for big FMCG players. But here's what I think gets glossed over. Kinder and Oreo aren't just well-distributed products. They have genuine cultural identities. Oreo has years of creative campaigns, limited editions, collaborations. Kinder is woven into childhood memory across Europe. Awareness like that doesn't come from just being on the shelf — it comes from consistent brand-building over time.
Marco: Which is exactly the strategic prompt hidden in this data. If you're a brand manager at Mondelez or Mars, the consumption numbers give you comfort. But comfort is dangerous here. The question is whether you're investing enough in youth-relevant brand-building right now, before a challenger snack format — something more culturally tuned to how Gen Z actually moves — starts eating into that awareness lead.
Klara: I'd slightly reframe that. It's not just about protecting the lead. It's about whether young consumers connect with your brand on their terms, not just your history. Legacy identity only carries you so far.
Marco: And that gap — between inherited awareness and earned relevance — is worth putting on the agenda this week.
Marco: Today's clearest signal — pricing pressure, brand investment, and shifting consumer habits are all moving at once, and standing still isn't a neutral choice.
Klara: So pick the one market or audience where your brand's position feels shakiest right now, and ask whether your current strategy is actually built for where that market is heading.