Focus - Diageo's Cube: Producing Spirits on the Move
While many drinks companies have highlighted Africa as a continent that offers huge potential, the region is not without its well-documented perils and pitfalls. Most notable among these is the logistical challenge of a continent that, broadly speaking, has a weak and under-developed infrastructure.
At the same time, many Africans are becoming more interested in spirits, especially the more familiar - and more affordable - local spirits sub-category. With its strong beer presence in the continent, and its specialisation in spirits, Diageo has been keen to get involved.
“Globally, we operate in premium and super-premium spirits,” says Chris Goddard, innovation marketing manager for Diageo in Africa. “In Africa, more than in other regions around the world, given the income levels, the premium segment is not accessible to the majority of Africans. There is a significant local, mainstream spirits category in the region. It's cheaper to access and it's big. And, we were not playing in it at scale across the continent. There was a white space for Diageo to participate in this category. The challenge was how to do it profitably.”
The Cube comprises five modified shipping containers
To overcome the logistical hurdle and to tap in to local spirits, Diageo has launched 'Cube', a mobile spirits production unit.
Debuting in Ghana late last year, Cube comprises five shipping containers, at a cost of "low single-digit millions GBP", that are attached to one another. The containers, which are constructed in the UK and then shipped to Africa, form a unit that utilises neutral spirit sourced from its new home country and allows for blending to make a spirits product. It also includes a bottling line and PET blow-moulding.
All it needs is access to electricity and water.
“We tend to put it in our existing factory plants,” says Goddard. “It's flexible and efficient. It can be dropped on to a site and be put into operation immediately.” The unit has a lifespan of 10+ years.
Among the spirits produced by the units are gin, dark spirits like rum or brandy and some whisky-style products. One unit has a capacity of about 300,000 cases a year, with Diageo producing spirits in both 20cl and 75cl bottles. And, since launching in Ghana, the company has also put up a unit in Nigeria.
To become operational, the mobile facility needs access to electricity and water
“It's early days,” Goddard says, “but they've been highly successful. Previously, we've had to work on an importation model. Here, everything is created within the borders. We use local suppliers for things like labels and crowns, and we use local resources to man it."
As things stand, the company is focusing on Africa for Cube. “It could travel, if other regions have a similar landscape in terms of a highly-developed, sizeable local spirits business,” notes Goddard.
“If it's a raging success, there's scope to replicate and increase the concept,” he says.“At the same time, if it's not a success, then we can be flexible with where we put our money. From a supply solutions perspective, it's a flexible and cost-effective step forward.”
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