Diageo India looking at growing non-alcoholic and/or Zero Alcohol and liqueur categories
Hina Nagarajan, CEO, Diageo India, said recent investments in craft beverage firms is "in anticipation of creating a new growth engine based on future-back assessment of where the consumer is headed."
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In line with Diageo India's strategy to add premium Indian provenance craft brand, which complements its existing portfolio, the Board of Directors approved the investments in V9 Beverages Private Limited, the makers of sober, nonalcoholic beverages, and Indie Brews & Spirits, makers of Quaffine coffee liqueur.
In a July 24 earnings call, Hina Nagarajan, CEO, Diageo India said, "Our strategic minority stake in both the companies is a step forward in our mission to strengthen our portfolio by partnering with breakthrough startup entrepreneurs and offering our consumers a wider choice of brand. Both are early-stage investments for us."
Addressing analysts questions about the rationale behind the investments where both companies seem to have seen a Y-o-Y dip on a small sales base, Nagarajan said, "We have been following an agenda of future-back consumer insights-led sort of innovation engine creation. And both these categories, which is nonalcoholic and/or Zero Alcohol as we call it, plus liqueur are categories that we do look at growing in the future.
She added, "They have some traction, and they are categories that we expect will gain much more traction. And therefore, our investments is very early-stage investments to create future engines of growth. These are small entrepreneurs. And clearly, as one of the objectives and goals that we have identified is not only to operate in local craft, premium craft but also help this craft ecosystem to grow."
Nagarajan stated that, with Diageo’s scale and support in terms of technology enhancements and distribution might, these are categories where the alcobev major sees the potential to scale up, grow and become national in the future. "And what we look for is the culture and culture fit of the founder and the quality of the product, which both ranges are very high quality. So, this is in anticipation of creating a new growth engine based on future-back assessment of where the consumer is headed," the Diageo India chief said.
