Dive Brief:
- Diageo North America is investing approximately $415 million to construct a 360,000-square-foot manufacturing and warehousing facility in Alabama for its popular alcohol brands, anticipating the creation of around 100 jobs upon full operation.
- The new facility will produce alcoholic beverages from Diageo’s portfolio, bringing the company closer to its southern distributors and enabling reduced transportation times and water usage.
- This investment is part of Diageo’s strategy to strengthen its global supply chain by cutting production costs and enhancing sustainability efforts.
Dive Insight:
Diageo is expanding its manufacturing presence in the U.S., especially in the southern region, aiming to enhance its market presence.
Marsha McIntosh, President of North America Supply Chain at Diageo, stated, “The new facility will not only bring our business closer to our customers in the south but also improve the efficiency and sustainability of our supply network.” This investment highlights Diageo’s commitment to building a more resilient supply chain in North America.
Over the past year, Diageo has diversified its offerings beyond traditional beer and whiskey, acquiring the nonalcoholic spirits brand Ritual and establishing a premium spirits business unit.
Diageo has denied rumors of selling parts of its business, including Guinness and its share in Moët Hennessy, emphasizing its focus on meeting consumer demand for alcohol products.
Other major alcohol companies like Molson Coors and Anheuser-Busch are also reconfiguring their manufacturing operations to align with changing consumer preferences.
Diageo’s upcoming earnings call on February 4 will provide insight into the company’s performance in North America, where it reported a decline in organic net sales in its last earnings report.