Diageo to invest £15M to help firms enter spirits sector
The venture, called Distill Ventures, will select five entrepreneurs in November who will receive initial funding of between £150,000 and £200,000 each.
The primary use of this investment will be to grow core business skills and fully develop products in the six-month seed programme, before graduating to the growth phase, Independents United’s programme manager Patrick McMeekin told FoodManufacture.co.uk.
A further £2M of funding will then be made available to each business next year as part of the growth programme.
Businesses can either graduate from the seed-funding programme or apply directly for this secondary phase of funding.
20% stake in the business
Diageo will provide businesses with the funding and offer advice on areas such as marketing and development. In return it will receive a 20% stake in the businesses. Independents United will deliver master classes in business and mentoring.
McMeekin said that demand for a venture into the spirits sector was high, because consumers’ choices were changing.
“Look at food over the last five years. There has been an explosion in choice – who would have thought gluten-free would have its own aisle in the supermarket. It’s the same with spirits. People’s attitudes are changing. We have been through the boom with vodka and are now seeing it in gin.
“If you have a stake in good brands, then that stands you in good stead for the future.”
Diageo, which created its premium Ciroc vodka brand from scratch, said the venture is the first to provide seed-funding to start-up businesses in the spirits sector.
“There is a remarkable entrepreneurial spirit in the drinks sector right now. We are seeing some brilliant new brands being born and built that are achieving commercial success,” said Syl Saller, chief marketing officer of Diageo.
“Our joint commitment to Distill Ventures will nurture, develop and grow the ideas and the people to create the pioneering premium spirits brands of the future.”
‘Innovative new product’
Meanwhile, Diageo launched what it claimed was one of its “most innovative products for a decade”, Baileys Chocolat Luxe, today (September 12).
The liqueur represented the first instance of Belgian chocolate being fused with alcohol, the drink’s creator claimed.
Anthony Wilson, who thought up the product, said the biggest challenge had been making sure the chocolate taste complimented the flavour of the whiskey, rather than overpowering the sweet, smoky essence.
He finally achieved this after 839 failed attempts, when he lowered the alcohol content by 1.3% to 15.7%, he said.
“Baileys was the first liqueur to fuse whiskey and cream, and now Baileys Chocolat Luxe heralds a groundbreaking innovation in chocolate."
