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Diageo North America has acquired non-alcoholic spirits brand Ritual Zero Proof, as part of its strategy to capitalise on the growing demand for alcohol alternatives.
Launched in 2019, Ritual has quickly established itself as the top non-alcoholic spirit brand in the US, reflecting a significant shift in consumer preferences toward healthier beverage options.
The brand's offerings include substitutes for whiskey, tequila, gin, rum, as well as an aperitif alternative, allowing consumers to recreate classic cocktails without the alcohol. The drinks are low in sugar, made with natural flavours and gluten-free.
Ritual's founders – David Crooch, Marcus Sakey and GG Sakey – developed their product line to provide consumers with flavourful alternatives to traditional spirits.
Ritual's approach has resonated with a diverse consumer base, as evidenced by the fact that 94% of non-alcoholic beverage buyers also purchase alcoholic options, highlighting the category's incremental value to the broader beverage alcohol market.
The acquisition aligns with Diageo's broader 'Growth Ambition' strategy, which aims to foster sustainable growth by investing in high-potential brands across emerging categories.
The non-alcoholic beverage segment has seen a 31% CAGR in retail sales over the past five years, with non-alcoholic spirits representing the fastest-growing category within adult beverages.
Sally Grimes, CEO of Diageo North America, said: "We are delighted to welcome it into our broader portfolio, where it will beautifully complement both our non-alc offerings, as well as those with alcohol, and serve to present consumers with even more choice and variety.”
This acquisition not only enhances Diageo's non-alcoholic portfolio but also positions the company to better serve a market increasingly focused on health-conscious choices.
Diageo's existing presence in the non-alcoholic segment is substantial, with the company already holding leading market shares in key markets globally.
The integration of Ritual into Diageo's portfolio is expected to leverage these strengths, further solidifying the company's position as the number one player in non-alcoholic spirits worldwide.
Since its initial investment in Ritual through Distill Ventures in 2020, Diageo has recognised the potential of the non-alcoholic landscape. Distill Ventures, an accelerator for founder-led drinks brands, has played a crucial role in supporting Ritual’s growth, enabling it to become a market leader.
As part of the acquisition, David Crooch will assume the role of general manager for Diageo's Non-Alcohol business unit, tasked with driving the expansion of non-alcoholic offerings across North America.
David added: “From day one, we’ve set out to create an iconic brand in the drinks industry, specifically designed to meet the needs of the modern consumer. Ritual brings this mission to life and Diageo understood that from the get-go".
He contonued: "With the continued and widespread growth of the category, there is significant market presence and consumer demand. Ritual has the ability to meet consumer desires and tastes, seamlessly offering traditional spirit alternatives ounce-for-ounce.”
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