Diageo to spend $500m on Tequila expansion

Diageo to spend $500m on Tequila expansion

Don Julio proprietor Diageo will make investments greater than US$500 million in increasing its Tequila manufacturing in Mexico.

Diageo's Don Julio brand
Don Julio is the world’s third biggest-selling Tequila model, hitting 1.8m instances in 2020

The funding can be used to increase its manufacturing footprint with new amenities in Jalisco, Mexico. Development is predicted to start subsequent 12 months.

Diageo mentioned the transfer will enhance the corporate’s development within the Tequila class.

Diageo is the proprietor of million-case Tequila manufacturers Don Julio, which it acquired in 2015 from the producer of Jose Cuervo, and Casamigos, co-founded by actor George Clooney and sold to the drinks giant in 2017 in a deal value as much as US$1 billion.

“In fiscal 21, Diageo’s Tequila natural web gross sales grew 79% with the class now representing 8% of the corporate’s natural web gross sales,” mentioned Álvaro Cárdenas, president, Latin America and Caribbean, Diageo.

“Progress was primarily pushed by North America, the place Tequila is benefitting from its broad enchantment throughout shopper events. This thrilling funding in Mexico will help our future class development to satisfy Mexican and worldwide demand.”

In July 2021, Diageo CEO Ivan Menezes mentioned he expects Tequila’s growth to be “steady”, “not explosive”, in markets past North America.

The brand new plant may even help the corporate’s 10-year sustainability motion plan, Society 2030: Spirit of Progress, by utilising environmentally pleasant know-how. Moreover, the power will create greater than 1,000 native jobs.

Diageo mentioned it had completed the primary growth of its amenities at El Charcón in Atotonilco El Alto, Jalisco, in 2019. This enabled the creation of extra jobs and helped the local people by way of initiatives together with Hablemos de Emprendedoras, a programme for native feminine entrepreneurs.

In a buying and selling replace yesterday (30 September), Diageo reported a ‘strong start’ to its 2022 fiscal year, however the firm expects ‘near-term volatility’ to proceed.

Diageo just lately expanded its agave spirits portfolio with the purchase of Casa UM, proprietor of the Mezcal Unión model.

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