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Diageo To Spend $80m To Expand US Ready-To-Drink Beverage Production

Spirits group Diageo said it would spend $80 million to install two can-filling lines at a new plant in Illinois, to boost production of fast growing ready-to-drink beverages.

The new facility in Plainfield, Illinois will make more than 25 million cases of ready-to-drink beverages every year, including Smirnoff seltzers and spirits-based cocktails from Crown Royal and Ketel One Botanicals.

Commercial production is expected to start by the summer of 2021, the company said in a statement.

"The strategic location of the new site, near our warehouse and Plainfield bottling operation, will allow Diageo to create synergies and the flexibility to expand and carry other market-leading brands in the future," said Perry Jones, president, North America Supply for Diageo.

"We are thrilled to expand our manufacturing footprint and further deepen our relationship with the Village of Plainfield," he added.

Fastest-Growing Category

Sales of ready-to-drink beverages rose 26% in North America in the second half of 2020, the fastest growing category for Diageo in the region during the COVID-19 pandemic, the company said in January.

Competition has been heating up for hard seltzers - flavoured sparkling water infused with alcohol - as liquor companies move to take advantage of a category where sales have doubled every year since 2016 in the United States.

Debra Crew, president of Diageo North America, 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 increased consumer demand in line with emerging trends for convenient formats that are ideal for casual and at-home occasions."

Earlier this year, Diageo said it would buy the maker of hard seltzer brand Lone River Ranch Water, while rival Anheuser-Busch InBev announced a more than $1 billion investment in its US manufacturing facilities to ramp up production of hard seltzers.

News by Reuters, additional reporting by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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