Diageo

Diageo's maturing inventory hit $7.8 billion in FY2024, up more than 42% in five years. The barrels are sold as a scarcity moat. They've also pushed the inventory-to-sales ratio materially higher over recent fiscal years and helped force production halts at three distilleries in 2025.

Diageo sells in nearly 180 countries and earns billions on brands assembled in a single 1997 merger. But Johnnie Walker — its world's best-selling Scotch — saw US net sales fall 10.6% in fiscal 2025, and the moat is shallower than the legend suggests.

Everyone credits Johnnie Walker for Diageo's protection. But its distilleries make roughly 40% of all Scotch whisky behind a barrier the UK government built and the trade body enforces - one that even told Diageo no.

For a decade Diageo grew premium-and-above to ~60% of net sales versus an industry's ~35%. Then the consumer quit trading up: organic growth fell to 1.7% in FY2025, FY2026 guidance was cut to down 2-3%, and the 5-7% target was withdrawn entirely.