Spirits giant Diageo has announced plans to establish a new research and development centre in Shanghai to further its product innovation and development ambitions in China.
The centre seeks to create an exciting portfolio of products developed in China, for China, based on local consumer insights and trends.
Construction of the research and development centre will commence in 2021, and it is expected to be fully operational by mid-2022.
The state-of-the-art facility, which Diageo says is the first of its kind in the beverage alcohol sector in Shanghai, will primarily support the China market and strengthen the company's ability to rapidly innovate and develop premium products that align with local tastes.
Diageo reported a 8.3% increase in reported net sales in the full year to 30 June, to £12.7 billion (€14.93 billion), boosted by the reopening of bars and restaurants in some markets and strong retail demand across all its regions.
Sam Fischer, president of Asia-Pacific and Global Travel at Diageo, described the move as another key step in the company's transformational journey to invest and deliver growth in a fast-moving and highly competitive market.
"China's total beverage alcohol market is the largest in the world in both value and volume terms, and is expected to grow over the next five years," Fischer said and continued, "Much of this growth will be driven by strong premiumisation trends that are accelerating as new channels and occasions emerge for international spirits, beer and new-to-world innovations."
He added that the new research and development centre and the recently opened logistics hub in Shenzhen would set Diageo up for "continued success" and reinforce its "strategic commitment to business across China."
Recently, Diageo made a minority investment in Japan's Komasa Kanosuke Distillery, a Kagoshima-based producer of ultra-premium single-malt whiskeys, through Distill Ventures, the independently operated and Diageo-backed drinks accelerator.