Diageo will cease bringing new brands into its Distill Ventures accelerator program for startup drink entrepreneurs, a Diageo spokesperson confirmed Wednesday.
Following more than a decade of investing in emerging spirits and adult non-alc brands, Diageo has “undertaken a strategic review” of its approach to early-stage, venture investments, the spokesperson said. Moving forward, Diageo will not bring new brands into the Distill Ventures program, while a smaller team will manage a reduced portfolio of existing investments.
The spirits giant did not offer further details on the strategy change.
Since its founding in 2013, Distill Ventures has invested more than $300 million in 39 founder-led brands. The accelerator has facilitated several acquisitions by Diageo, including cold brew coffee liqueur Mr Black, Japanese rice whisky Kikori and vermouth brand Belsazar. Though the group has invested in traditional spirits (others include Danish whiskey label Stauning and German distillery Rheinland), it has also ventured into the non-alcoholic spirit space through brands such as Seedlip and Ritual Zero Proof, which were both acquired by Diageo.
The company launched its Pre-Accelerator program in 2021, designed to open up capital opportunities and business advising for entrepreneurs from underrepresented communities. That program has supported brands including VERVET, Atōst, Kromanti Rum and canned cocktail Lot42. The most recent cohort, announced in May 2023, backed CASA J, a female- and Mexican-owned tequila blanco brand; Pimentae, a London-based and female-founded tequila canned cocktail; Idle Hands, a Black-owned flavored tequila; Lodestar, a pre-launch American Whiskey; and Tanica, a woman-owned, low-ABV spirits producer.
Distill Ventures was founded in 2013 by Frank Lampen, Shilen Patel and Dan Gasper. Heidi Dillon has served as the most recent CEO, after joining the London-based firm in 2018 to oversee its U.S. business, first as portfolio director of its non-alcoholic drinks practice before becoming managing director of North America in 2020.
The shift comes as major spirits groups face a flat marketplace, and Diageo in particular has been under pressure from investors after post-pandemic dips and a surprising slump in Latin American sales in FY 2023. In its latest earnings report the company withdrew its +5% to +7% sales growth target, and warned of a potential $200 million hit from tariffs.