British alcoholic drinks maker Diageo PLC, through its venture capital arm Distill Ventures LLP, invested in Chicago-based spirit alternative Ritual Zero Proof as it looks to capitalize on the growing preference for nonalcoholic drinks among customers.
Ritual Zero Proof offers a nonalcoholic alternative to whiskey in cocktails. The products bear "the taste, smell and burn of a spirit — without the alcohol or calories," said Marcus Sakey, founding partner and chief brand officer of Ritual Zero Proof.
Distill Ventures' investment in Ritual Zero Proof comes as it builds its portfolio of nonalcoholic drinks. Diageo's first investment in a nonalcoholic drinks company was Seedlip Ltd. in 2015.
"We look forward to working closely with Ritual's team to unlock growth as, together, we shape the global nonalcoholic drinks landscape," said Heidi Dillon Otto, Distill Ventures North America's portfolio director and nonalcoholic lead.
The spirit alternative brand said the cash investment will help it drive its growth in the U.S., finance its direct-to-consumer business and help it enter retail. Financial terms of the deal were not disclosed.
Following the investment, Ritual Zero Proof's founders and current investors will retain majority ownership and control of the company, with Diageo holding a minority stake.