Diageo is pulling out of its Distill Ventures accelerator programme as part of a wider plan to reshape the drinks group and deliver long-term growth.
Distill Ventures was founded in 2013 as the world’s first spirits industry accelerator and immediately secured Diageo’s backing.
Diageo has since invested in excess of £245m in more than 35 businesses, according to the accelerator’s website, and acquired six brands, including Seedlip, Tipplesworth and Mr Black.
Distil employs 35 staff and has at least seven startups in its current portfolio. As Diageo is the sole investor, its withdrawal is expected to lead to job losses at the company.
The start ups affected have not been named. Last year, two US brands, Jackson McCrea whiskey and Ume Plum Liqueur, joined Distill’s pre-accelerator programme, receiving up to $500k in investment.
Diageo said the decision had been made after a strategic review of its approach to early-stage, venture investments.
“Moving forward, Diageo will not be bringing in any new brands into the Distill Ventures programme, whilst a smaller Distill Ventures team will remain in place to manage a reduced number of existing investments,” a spokesperson said.
The move comes after Diageo CEO Debra Crew set out a company strategy in February in an attempt to deliver a sustainable long-term performance.
This includes disciplined capital allocation, portfolio management and actions to deleverage the balance sheet.
Diageo is under pressure from investors to boost sales, with its share price down almost 30% in the past year.
The drinks giant scrapped a long-held sales target in February blaming falling alcohol sales and possible tariffs in the US.
Last year, Diageo created a ‘breakthrough innovation’ team to shape innovation “beyond the development of new products”. The team is focused on new platforms, technologies and experiences, as well as evolving Diageo’s current portfolio and delivering its ESG plans.
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