INDIA – Diageo has invested US$4.1 million in Indian craft gin maker Nao Spirits as part of efforts to strengthen its participation in the fast-growing premium gin segment in India.
According to a statement from the company, the investment will give its subsidiary United Spirits Ltd (USL) a minority 22.5 percent stake in Nao Spirits.
Diageo India will also have a call option to acquire the remaining shares on “pre-agreed principles” in Nao Spirits & Beverages Private Ltd, a joint statement said.
Launched in 2016 by Anand Virmani, Nao Spirits is an emerging craft gin company in India, with brands ‘Greater Than’ and ‘Hapusa’.
Gin has been creating a market for itself in the Indian alcoholic beverage scene, finding acceptance among upmarket, urban consumers thirsty for newer forms of social engagement.
IWSR forecasts premium gin to grow at 11.1% CAGR between 2020-2025, creating new opportunities for alcoholic beverage companies.
The acquisition of Nao Spirits thus provides Diageo India with an opportunity to strengthen its participation in the fast-growing premium gin segment in India.
With Nao Spirits, Diageo can also expand its share of the India gin market which is projected to reach around US$ 413.7 million by the end of 2027, in terms of revenue.
Diageo India MD and CEO Hina Nagarajan said, “As a company built from founder-led brands, we are excited to make our first move in India to support bold and path-breaking entrepreneurs.
Over the last three years, the Indian market has witnessed the emergence of multiple craft gin players and Nao Spirits has been a game changer in the category.”
US$191m carbon neutral distillery
Elsewhere, Diageo has announced plans to build a C$245m (US$191m) distillery in Canada to support momentum and growth ambitions for its Crown Royal Canadian Whisky brand.
The St. Claire, Ontario facility will include a distillery, as well as blending and warehousing operations and will have the capacity to produce up to 20 million liters of absolute alcohol.
It will be built according to a carbon-neutral design informed by Diageo’s sustainability action plan, called ‘Society 2030: Spirit of Progress’.
Resource efficiency technologies will be deployed at the facility to minimize waste while operations will be run 100% on renewable energy to ensure the new distillery is carbon neutral.
A zero-waste to landfill policy covering the distillery’s direct operations will also be in place, supporting Diageo’s mission to achieve net-zero carbon across its direct operations by 2030.
Construction is anticipated to begin in the second half of 2022 and the distillery is expected to be operational in 2025.
Diageo expects the new distillery to supplement the company’s existing Canadian manufacturing operations in Amherstburg, Ontario, Gimli, Manitoba, and Valleyfield, Quebec.
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