Diageo invests US$5.7m in craft and innovation hub to strengthen presence in India’s growing alcoholic market

INDIA – Alcoholic beverage giant, Diageo through its Indian subsidiary, is investing Rs45 crore (US$5.7m) in constructing a Goa-based craft and innovation hub, which will help in meeting the growing demand for alcoholic drinks in India and globally.

The facility located in the city of Ponda will spread across 4 acres and contain the infrastructure to produce 20,000 cases of spirits a month, with in-house distillation for malt, gin, and rum.

It will also house blending and maturation for spirits, automated bottling and packaging line, and a warehouse for incoming and finished products.

The state of art hub will employ 250 people locally, and act as an incubator for craft and premium spirits brands in India, Diageo India said.

In line with the Johnnie Walker brand owner’s commitment to its 2030 sustainability goals, the hub is said to be powered by 100% renewable energy for distillation.

About 40% of the in-house renewable electricity will be generated by its own solar plant and steam turbine.

“Goa is a hotbed for craft, demand for which is growing rapidly both in India and globally, among consumers who are keen to further discover and enjoy fine spirits,” said the MD and CEO of Diageo India Hina Nagarajan.

Our hub will serve as an incubator for select start-ups, providing them with sophisticated infrastructure to build their offerings. We are excited about the innovative possibilities this facility could bring not just for us, but the entire ecosystem as well.”

In recent years, Diageo’s business in India has focused on the premium end of the spirits category, with United Spirits siphoning off 32 brands in its “popular” portfolio to Inbrew Holdings, with sales of the 32 brands valued at roughly INR8.2bn (US$105.5m).

Hina Nagarajan, managing director, and chief executive officer of Diageo India stated in June that selling premium brands, in line with its strategy to pursue “value over volume,” is the way forward for Diageo in the country.

The spirits maker, with a market capitalization of $98 billion, also owns homegrown money spinners such as Black Dog scotch and the McDowell’s, Royal Challenge, and Signature whiskies after it bought a controlling stake in Indian liquor baron Vijay Mallya’s United Spirits.

In India, the premiumization trend has gained momentum over the past few years with the normalization of alcohol consumption at home, said Nagarajan, and the company will continue to bring in more brands from the global portfolio, as well as launch new products.

Spirits makers, including Diageo, are pinning their hopes on the proposed Free Trade Agreement between India and the UK, which would moot the high tariff on imported liquor among others, to make premium brands relatively affordable.

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