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Diageo looks to US for next non-alcoholic ‘spirit’ brand

Drinks giant Diageo has broken new ground in the low and no-alcohol sector by investing in a zero proof ‘spirit’ brand based in the US.

The range includes Ritual Zero Proof Gin Alternative and Ritual Zero Proof Whiskey Alternative

Distill Ventures, an incubator for small drinks companies funded by Diageo, has acquired a minority stake in Ritual Zero Proof, founded in Chicago by three best friends Marcus Sakey, GG Sakey and David Crooch in 2019.

Distill Ventures will help to drive the brand’s growth in the US by funding its direct-to-consumer business, and will help Ritual debut in the country’s retail market.

Ritual claims to be the first US-based alcohol-free brand that “echoes the taste and smell of spirits.” The range includes Ritual Zero Proof Gin Alternative and Ritual Zero Proof Whiskey Alternative, all designed to be used in cocktails.

The brand’s founders and current investors will retain their majority ownership and will continue to run the business independently from DV.

Ritual sold out of its projected six-month supply of product in just five weeks of launching in September, according to the founders.

It is the first US non-alcoholic brand to publicly join forces with Distill Ventures, which supports emerging businesses with investment and guidance.

Non-alcoholic drinks make up around a quarter of the brands enrolled in DV’s accelerator programme. The investment arm of Diageo acquired a minority stake in Seedlip in June 2016. The company helps fund innovation within the spirits world, drawing on industry expertise to identify, invest in and accelerate aspiring drinks brands, while affording Diageo an effective route to invest in new spirits brands.

Seedlip was the first non-alcoholic brand to ‘graduate’ from DV’s programme, and second overall after vermouth brand Belsazar. Diageo upped its investment in the business to a “significant” majority shareholding in August 2019.

According to a 2019 Distill Ventures data study, 58% of consumers are drinking more no-and low-abv drinks than last year, and 55% of the most influential bartenders in New York, Los Angeles and London believe the no-and low-alcohol trend will continue to grow within the next 12 months.

Marcus Sakey, founding partner and chief brand officer of Ritual Zero Proof, said that non-alcoholic spirit alternatives are “changing the landscape.”

“In 18 months, we predict non-alcoholic options will be on every menu and the shelves of every grocery store.

“Americans want more choice, and Ritual Zero Proof is all about more – more flavour, more moments, more life, that is. It’s the only American-made spirit alternative to echo the taste, smell and burn of a spirit – without the alcohol or calories.”

Eugene Khabensky, ventures director at Diageo, said: “We are excited to support such an interesting new brand in the vibrant non-alcoholic space.”

You can read more about Distill Ventures’ work with Seedlip, and the low and no-ABV drinks trend here.

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