December 4, 2015 – In one of the largest investments for its Distill Ventures unit, Diageo will invest around 100 million Danish kroner (approximately $14.6 million USD) for a 10 percent stake in Denmark’s Stauning Distillery. According to Berlingske Business, the investment will help fund an expansion aimed at significantly increasing the distillery’s capacity from its current 15,000 liters of alcohol per year, while the distillery’s nine founding partners will still retain control of the business.
“It was very important to us that we kept control of the production and the quality of the whisky,” co-founder Martin Vesterby told WhiskyCast in a Skype interview. “The reason that we ended up with a deal like this one was that we were actually given the possibility to receive funding from what you call a venture, and still try to keep focus on what we’re used to doing…they are interested in giving us and creating the space for us to create the whisky and create the innovations in the area of producing whisky.”
Listen to Mark Gillespie’s interview with Martin Vesterby:
Distill Ventures is Diageo’s in-house equivalent of a venture capital firm, charged with finding new investment opportunities for the world’s largest spirits producer. The unit provides seed capital, along with mentoring from Diageo’s team of distillers and marketing executives, in exchange for a stake in the business and the right to acquire the entire company in the future. In most cases, seed funding is limited to £175,000 GBP (around $265,000 USD), but Stauning managing director Lasse Vesterby told Berlingske Business that Distill Ventures first reached out to the partners about two years ago to express an interest. Those discussions picked up steam about six months ago, ending with today’s announcement of the investment.
Stauning currently produces traditional peated and unpeated single malts, along with a malted rye whisky, and began full-scale distilling in 2009. The new distillery is in the design stages, with construction expected to be completed in 2018.
Editor’s note: This story was updated on December 5 with additional information following an interview with Stauning’s Martin Vesterby.