UK: Diageo debuts GBP40m Scotch whisky distillery
Diageo's Roseisle distillery will provide spirit for brands including Johnnie Walker
Diageo is preparing to open the first major Scotch whisky distillery for 30 years to help the Johnnie Walker distiller cater for growing demand in emerging markets.
The GBP40m (US$63.4m) distillery, one of the largest in the industry, is located in Roseisle near Elgin and will officially open its doors next month. It has the capacity to distil 10m litres of pure alcohol per year.
Diageo intends to use the facility to supply the growing number of Scotch consumers in Asia, Africa and Latin America thirsty for brands such as Johnnie Walker, J&B and Buchanan's.
"Economic growth and consumer demographics present a great opportunity for the Scotch whisky industry and for Diageo's outstanding brands, especially in the developing markets," said Diageo's CEO, Paul Walsh, today (29 September).
Diageo sees particular opportunities for its whiskies in Brazil, Mexico and China, driven by interest from younger consumers and from emerging middle classes keen to show their rising social status.
"You could buy a Mercedes Benz or an iPad, but US$20 to put a bottle of Johnnie Walker on your dining table is a great way to show that you're going up in the world," said David Gates, Diageo's global category director for whisky. Gates' comments came at a preview visit to the distillery for journalists.
On Johnnie Walker's prospects in the key China spirits market, Gates added: "I'm feeling more confident than I have for the last six years. We're beginning to gain share there."
The Roseisle distillery is part of Diageo's three-year, GBP100m investment in its Scotch whisky operations, which also includes the construction of a new bottling plant and a GBP10m cooperage. Whisky from Roseisle will be first used in Diageo blended Scotch brands from 2012.
Global sales of Scotch whisky rose by 3% to GBP3.13bn in 2009, with volumes up by 4%, according to the Scotch Whisky Association (SWA). A spokesperson for the SWA told just-drinks that the upwards momentum has continued into 2010, although official figures have yet to be released.
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