Diageo North America has acquired Ritual Zero Proof Non-Alcoholic Spirits (Ritual).
Since its launch in Chicago, IL in 2019, Ritual has grown rapidly and is now the number one non-alc spirit brand in the United States, the company says.
This transaction is in line with Diageo’s Growth Ambition to deliver the company’s next phase of sustainable growth, the company says.
Ritual’s founders – David Crooch, Marcus Sakey and GG Sakey – experimented with hundreds of recipes and consulted with bartenders, chefs and beverage professionals in their mission to recreate the flavor, aroma and complexity of spirits. Today, the brand’s portfolio contains alternatives to whiskey, tequila, gin, rum and aperitif, which can all be substituted one-to-one with traditional spirits to create non-alc versions of well-known recipes.
“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,” says cofounder Crooch. “Ritual brings this mission to life, and Diageo understood that from the get-go. 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.”
In the U.S., the non-alc category has grown retail sales value +31% CAGR over the past five years, Diageo reports, with non-alc spirits as the fastest growing segment within adult beverages over that time. Ninety-four percent of non-alc buyers also purchase beer, wine or spirits containing alcohol, and annually, U.S. households (21+) purchasing non-alc beverages spend $292 more than households exclusively purchasing alcohol-containing beer, wine or spirits.
“Ritual Zero Proof is the number one brand in the fastest growing adult beverage category, and meets growing consumer demand for a flavorful and sophisticated, yet accessible spirits alternative,” says Sally Grimes, CEO, Diageo North America. “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.”
In fiscal year 2020, Diageo acquired a minority stake in Ritual through Distill Ventures.
“This acquisition is proof of the mainstream potential of the category, and our shared ambition to make sure a non-alc cocktail is available on every menu and on every grocery and liquor store shelf, providing sophisticated choices to today’s consumer,” says cofounder Sakey.
Cofounder Crooch will remain actively involved with the brand, working with the Diageo team to build on Ritual’s success. He has been named GM, Diageo non alcohol, to lead the expansion of Diageo North America’s non-alc business unit.
In addition to traditional retail outlets, U.S. consumers can also purchase Ritual products via an ecommerce network, which includes RitualZeroProof.com.
This acquisition is in line with Diageo’s strategy to acquire high-growth brands in exciting categories, the company says. It has been funded through existing cash resources.
