Diageo's Latest Acquisition Fortifies Their Non-Alcoholic Portfolio

The hottest trend in booze right now is the absence of actual booze. That might sound like a paradox the first time you see it, but one of the biggest positive trrends in the industry involves non-alcoholic beer and spirits. As The New York Times‘ Dana G. Smith reported last month, it’s a rapidly-growing segment of the overall market — due in no small part to the fact that a lot of these drinks are very good.

And where there’s growth in the industry, there are also business deals to be had. And that’s how Diageo — owner of the likes of Johnnie Walker, Oban and Talisker — came to acquire Ritual Zero Proof, the country’s largest non-alcoholic spirit producer. This isn’t Diageo’s first step into that market; the company took a majority stake in Seedlip back in 2019. But it does feel like a significant step forward, and a sign that Diageo is looking to expand its holdings in the non-alcoholic space.

For Ritual Zero Proof’s founders, one might say that this acquisition is something of a — pun very much intended — proof of concept. “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,” said the company’s co-founder, Marcus Sakey, in a statement.

Spirits industry Dave Infante noted last month in his newsletter that Diageo’s results for the second quarter of this year showed a loss, their first since the pandemic. In light of that news, this acquisition seems like a savvy decision: namely, buying an industry leader in a space where Diageo doesn’t have as much of a foothold.

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As Vinepair’s Pete O’Connell pointed out in a report on the transaction, Diageo first invested in Ritual Zero Proof four years ago. And this acquisition sure seems like it heralds more news ahead: Ritual Zero Proof co-founder David Crooch is set to take a new position as Diageo Non Alcohol’s General Manager.