Diageo to build US$130m whiskey distillery in Kentucky, US

USA – The world’s spirits major, Diageo plans to build distilled spirits manufacturing facility in Kentucky,the United States to increase production of whiskey categories in the market.

The facility includes a distillery and warehousing on an approximately 144-acre site at Lebanon in Marion County with a goal to start production in 2021.

According to the company, the plant will be able to produce up to 10 million proof gallons per year or 3.8 million 9 litre cases.

It will manufacture a variety of current and future bourbon and American whiskey brands, creating 30 new full-time jobs.

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Diageo said with the expansion, it will be able to supplement its Kentucky operations at the historic Stitzel-Weller distillery in Louisville and the Bulleit distillery, which began operations in 2017 near Shelbyville.

The Shelbyville facility can produce up to 3 million proof gallons annually, or 1.1 million 9-liter cases, though there is room for Diageo to expand the plant.

The investment plans, which have received approval of an incentive package from the Kentucky Economic Development Finance Authority were welcome by Marion County officials.

Kentucky governor Matt Bevin said: “This latest investment by Diageo is indicative of continued growth for the company and within our bourbon and spirits industry.

“We are proud to further our relationship with Diageo, and of the job growth associated with these announcements.

On behalf of the state, our thanks go out to Diageo for its commitment to the commonwealth.”

Supporting whiskey growth ambitions

As Diageo looks to become one of the best performing, most trusted and respected consumer products companies in the world, this expansion reiterates its commitment in growing the bourbon and American whiskey categories.

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The company aims to enhance premiumisation in these categories in developed and emerging countries, supported by population and income growth, and the increasing penetration of spirits around the world.

The company whose brand line-up includes Bulleit bourbon is hoping to increasingly tap into the popularity of American whiskeys.

“We thank the Kentucky Economic Development Finance Authority, governor Matt Bevin,the Marion County Industrial Foundation, and the city of Lebanon for their continued support of Diageo as we look to further invest in Kentucky’s spirits industry,” said Barry Becton, senior director of federal affairs and whiskey at Diageo North America.

“Bourbon and American whiskey are vibrant and growing categories and we are excited to expand Diageo’s footprint in Kentucky to support our ambitions in this space.”

The development is set to offset challenges in key overseas markets especially the European Union which has slapped tariffs on bourbon and other American whiskeys.

In 2017, Kentucky spirits producers exported nearly US$200 million of their products to the European Union.

In November, Diageo, the parent company to Guinness sold 19 spirits brands,including Seagrams VO whisky and cinnamon schnapps Goldschlager, to US-based company Sazerac for US$550 million.

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