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Distill Ventures invests £10 million in Denmark's Stauning whisky

Published:  07 December, 2015

Distill Ventures, the Diageo-funded accelerator programme for entrepreneurs in the spirits sector, has made its first major growth investment.

Danish whisky brand Stauning is receiving an investment of £10 million to fund a significant expansion in their distillation capacity.

The company will continue to malt in house and to distill its whisky in small stills using direct heat, but it will now be able to add sixteen new stills to its present tally of four.

The expansion will enable it to increase significantly its 15,000-litre annual production.

Diageo will also assist the business with strategic advice as it plans future growth in international markets.

David Gates, Diageo's global head of premium core spirits, will sit on the board of Stauning. Gates has run Diageo's whisky business for 24 years.

Gates said: "At the heart of Diageo's whisky portfolio are brands that were created by visionary entrepreneurs, from the Walkers through to Tom Bulleit.

In Stauning, I believe we have found a company defined by visionary founders and an exceptional whisky, with a brilliant story to tell. We know that whisky drinkers are looking for distinctive and exciting new brands and are embracing new propositions from around the world.

This investment extends our presence in the exciting new world whisky opportunity through a partnership with a really exciting team.''

Frank Lampen, co-founder of Distill Ventures, said: "This deal represents a step change in the scale of investments Distill Ventures is undertaking. When we find outstanding businesses, we can fund major capital projects and investment in stock as we are in this case.

"Our focus is on helping entrepreneurs to realise their vision and we are delighted to be working with Stauning, as they scale their business and take their great whiskies beyond Denmark."

Launched in 2013, Distill Ventures is a joint venture between Diageo and London-based innovation specialists Independents United.

It has two different investment structures, depending on the maturity of the business requiring investment.

Its seed programme is for entrepreneurs who have recently launched or are about to launch a spirits brand.

The growth programme also allows for investments in business that have a proven sales and customer base but are needing investments to scale up and have an ambition to the become a successful global brand.

Seed investments are capped at £175,000, whereas growth-programme investments have no limits.

Distill Ventures began discussing a possible investment in Stauning in the summer of 2014.

The investment forms part of Diageo's broader strategy of focusing on premium and reserve brands as the whisky category develops globally.

Stauning was founded in Jutland by nine friends as a hobby in 2005.

Its products have won a range of international awards, including best European single malt (under 12 years old) and best European rye (under seven years) at the 2014 World Whisky Awards.

Under the terms of the investment, the founders of Stauning will retain a majority shareholding in the company and continue to operate the business independently.

Stauning Peated retails at £86 in the UK, and Stauning Young Rye at £47.