DIAGEO PLC

to believe in the

attractive long-term

fundamentals of

our industry in an

evolving TBA landscape.

Long-term fundamentals

remain compelling. By 2035,

600 million new legal-

purchase-age consumers will

enter the market,(2) with Gen Z

becoming the first 2-billion-

strong generation.(3)

Gen Z penetration in spirits is

increasing in the United States,

primarily driven by spirits-

based ready-to-drink products

and tequila.(4) Across our key

markets, their engagement

with spirits is higher than the

average for the total drinking

population, indicating they are

entering the category earlier.(4)

They also allocate a similar

proportion of their annual

expenditure on alcohol as

other generations.(5) Recent

data shows an increase in LPA+

Gen Z consumption compared

to the levels in 2023.(6)

Our recent US research

indicates that cannabis and

GLP-1s have not yet shown

significant disruption to spirits

consumption, and we continue

to monitor them closely.

Moderation is a long-term

consumer trend, where we see

consumers choosing to drink

better not more. Between

2009-2024, international spirits

(excluding baijiu and RTDs) per

capita consumption has

remained broadly stable

(2009-2024 CAGR -0.4%), even

as total beverage alcohol

declined by 1.2%.(7) This

highlights the strength of the

spirits category and the

category's resilience in a

moderating environment;

gaining share from beer

and wine.

Moderation presents a

significant opportunity for

Diageo, the inherent versatility

of spirits makes moderation

more accessible and appealing.

We have a broad portfolio and

leadership in non-alcoholic

innovation, including Seedlip,

Ritual Zero Proof, Tanqueray

0.0, Gordon's 0.0 and Guinness

0.0. These offerings

complement our core

portfolio, support responsible

choices and position Diageo

to help shape the future

of moderation.