LONDON, United Kingdom — Diageo has acquired a majority share in trendsetting non-alcoholic spirits brand Seedlip, as sales of non-alcoholic beer, wine and spirits hit a record high in the UK.
The drinks company, which previously owned 20% of Seedlip through its Distill Ventures division, which supports entrepreneurs as they develop and scale drinks brands, believes the startup is a game-changer, with significant growth potential.
In just over four years since founder Ben Branson set out to solve the dilemma of ‘what to drink when you’re not drinking’, Seedlip has grown from his kitchen to establishing a presence in more than 25 countries. The brand’s three variants are currently stocked in over 7,500 of the world’s best bars, restaurants, hotels and retailers, including the majority of the world’s 50 best cocktail bars and over 300 Michelin Star restaurants.
According to the entrepreneur, whose ambition is to change the way the world drinks, the acquisition marks another big step forward to achieving this.
“Distill Ventures’ and Diageo’s shared belief in our vision has enabled us to build a business that’s ready for scale and I’m excited to continue working with Diageo to lead this movement,” he commented.
With millennials spending less money on alcohol than previous generations, industry giants have been clamouring to make themselves heard in this new era of wellness-centric consumers. This has resulted in a wave of clean spirits, functional beers and other health-focused alcohol products coming to market.
Heineken sold 15 million bottles of its non-alcoholic 0.0 beer last year. Elsewhere, startups including Kin Euphorics, a non-alcoholic, functional beverage brand and Haus, a low-alcohol direct-to-consumer aperitif have both raised undisclosed investments, no doubt piquing the interests of other beverage behemoths keen to buy into the trend.
And with recent research from Nielson revealing that Britons spent a record £57 million in the 12 months to April on low or non-alcoholic beers — an increase of 39 percent. And a further £48 million on low or no-alcohol wines over the same period, the pivot towards a more mindful approach to drinking appears to be sticking.
Talking to the Standard, Gemma Cooper, Commercial Business Partner at Nielsen, said the demand for non-and low-alcohol drinks was not exclusively driven by the “health-conscious”, adding there was “across-the-board” interest from all consumers who increasingly want ways to “cut down”.
She added: “Our data shows that just over one in 10 shoppers say they are looking to cut down their alcohol consumption. And while most are doing this by simply drinking less, some are turning to low or no-alcohol products.”
As a pioneer of the £5 million non-alcoholic spirits category, Seedlip already possesses a major first-mover advantage, when it comes to capitalising on this shift in consumer behaviour.
The goal now is for Diageo to continue working with Branson to grow what they believe will be “a global drinks giant of the future”.