Diageo North America will invest US $ 80 million to increase production of its RTD products, including Smirnoff salts and the Crown Royal and Ketel One Botanicals canned cocktail brands.
Diageo is investing in the ready-to-drink (RTD) market and plans to expand its production capacity by installing high-speed canning lines at a new plant in Planfield, Illinois.
This decision will give Diageo the capacity to produce more than 25 million cases of its RTD products each year. The 225,000 square foot site will be equipped with two canning lines, one capable of producing 500 cans per minute, while the other can produce 1,200.
Diageo hopes the site will be ready for commercial production by this summer.
Diageo North America President Debra Crew said, “As the ready-to-drink category continues to grow rapidly in the United States, this expansion is very exciting as it will support our plans to meet growing demand. consumers in line with emerging trends. for practical sizes that are ideal for casual and home occasions. The new operation will complement our existing production of ready-to-drink products in North America and strengthen our path to continue to develop our RTD offering. “
According to IWSR data, the RTD category in the United States, which includes soft drinks, flavored alcoholic beverages, and premixed cocktails, is expected to achieve volume growth of 35.3% compound annual growth rate (CAGR) from 2019 to 2024. Globally, the analyst predicted that RTDs grew 43% last year and were the only alcoholic beverage category to see volume growth.
Credit Suisse estimates that 200 million cases of seltzer and RTD spirits were produced in the United States last year, with volumes expected to reach 350 million cases this year. The analyst estimates that Diageo’s investment will represent a net sales opportunity of $ 800 million, representing about 15% of its total sales in the United States.
Perry Jones, President of North America Sourcing at Diageo, added: “The strategic location of the new site, close to our warehouse and the Plainfield bottling operation, will allow Diageo to create synergies. and the flexibility to grow and market other leading brands in the future. We are excited to expand our manufacturing footprint and further deepen our relationship with the Village of Plainfield. “
The site will create around fifty full-time jobs. Diageo opened its first operation in Plainfield in 1966 and today employs over 600 people in the area.