To help increase diversity within the drinks industry, Distill Ventures, the brand development and start up investment arm of Diageo, is launching what it is calling a new ‘Pre-Accelerator Programme’ dedicated to early stage founders from underrepresented groups that often are overlooked for corporate funding and private investment. It is pledging to invest $5 million in drinks entrepreneurs from diverse backgrounds over the next 12 months. Here Distill Ventures’ portfolio director, Ara Carvallo, explains how the scheme is going to work and how it is part of its overall commitment to drive diversity and inclusion.
Distill Ventures has helped give drinks brands a chance they would never have had before. It is now doing the same but focusing on the individuals behind new drinks start ups with its new diversity and inclusion entrepreneurs funding scheme.
Can you explain the thinking and why you have set up this new investment scheme?
We want to dedicate focus on diversifying the ownership of drinks brands by addressing a key barrier head on: access to seed funding. We know that opportunities for entrepreneurs are not equally accessible to all, and so at the heart of our company-wide inclusion and diversity initiatives is the creation of a new Pre-Accelerator. It will enable us to work with early-stage founders that face barriers in getting the access to the required capital to further develop their ideas and business plans. This change cannot happen overnight, but we are excited to help evolve the drinks world, one founder-led brand at a time.
How is the scheme going to work in terms of the kind of businesses and individuals you want to enter and support?
We encourage all under-represented individuals and teams to apply. And while we’re doing active outreach within certain populations that have been negatively impacted the most, such as black, Latinx and people who identify as female, we recognise this will evolve and expand over time. There is no identity requirement to be considered, only that you identify with a community that has been historically marginalised.
Through networking, research, and partnerships with local communities, we’re working to connect with these founders to learn more about them, their brand and their ambitions to determine whether they may be a fit for the Pre-Accelerator.
Do they need to be start-ups or established businesses?
The launch of our Pre-Accelerator is part of our broader commitment to focus on brands that will diversify ownership in our industry by getting investment to early-stage founders faster through flexible, focused support. Through the Pre-Accelerator, we’ll focus on helping brands through the early stages of launch, learning as much as possible as quickly as possible. We know this will lead to a better foundation for scaling brands.
What criteria will you use to determine who gets investment?
First and foremost, the brand must be owned by a founder or founding team from an underrepresented group. The product must also be in-market and available to purchase, even if only in small quantities. This might mean in a local bar and a few stores or direct from the brand’s website. It’s also important that the founder has an understanding of who their customers are and what might make their brand a good fit for them.
How do you determine how much they receive?
Once we’ve established mutual interest, we work together to develop three key priorities that we want to test, learn and prove out over a six to 12 month time frame. With this plan in place, together we determine the amount of funding needed – typically between $250-500k (USD).
Will you be providing hands up on support and advice to work with the businesses and individuals so that they can maximise the investment?
Absolutely. Once the investment is agreed, founders will immediately begin work with Distill Venture’s acceleration team. Over the following six to 12 months, we’ll work together to bring the plan to life, working towards these mutually agreed goals, showing growth, engagement and sales traction. With these results, we’ll help the founders build their pitch to take to our Investment Board with the potential to work with DV and Diageo as a long-term partner.
The Pre-Accelerator is very much a part of the DV Accelerator, we built it specifically to give smaller brands a smoother runway into Distill Ventures. It’s a space where teams can test and learn before setting hard commercial goals and ambitious growth plans for the future. It’s also where people who are new to the drinks industry can learn about crucial industry standards and practices, like the 3-tier system, distribution, and liquid R&D, in a less pressurised environment.
How many people and companies do you hope to help?
We intend to invest $5 million in early-stage drinks entrepreneurs over the next 12 months, but there really is no set quota for how many founders we’ll be helping. We have a strong commitment from Diageo – one that provides ample opportunity to work with a broad range of founders – and the most important thing for us is finding the right, ambitious founders, that have a clear vision.
You have a number of other diversity and inclusion measures and schemes in place – can you explain what they are?
In addition to the Pre-Accelerator, we are also focusing on internal education, diversifying our hiring and recruitment practices, and external portfolio support.
We have brought in outside support to implement DV team training, focusing primarily on educating our team through company-wide workshops, individual and small group coaching. The beginning phase of this work is focused on full team evaluations and the implementation of a six-month learning program.
We are also forming a recruitment partnership in the US that will better help us implement more equitable hiring practices for DV and our portfolio companies. This includes more inclusive talent development and hiring practices to broaden representation at all levels of our industry.
What do you see as being the most effective way of promoting and supporting a credible D&I strategy?
Listening and learning is key. Before taking action, we spent a lot of time having conversations with industry members from underrepresented communities and working with consultants along the way. Additionally, we’re connected to Diageo’s global I&D experts. Collectively, we’re checking in with these resources every step of the way. Our goal is to create something that adds value – something that founders want – and we’re listening and learning ourselves along the way.
For those that don’t know Distill Ventures can you give an idea of the kind of work you have done in bringing new talent to the market?
We’re the world’s first drinks accelerator, created to support founders as they build and scale the global drinks brands of the future. DV was born out of a passion to connect visionary drinks entrepreneurs to funding and resources to help them bring their brands to life and scale in the marketplace.
We help founders – both at early-stage companies and mature brands who are scaling fast- grow farther, faster. We do this in four ways: by providing cash investment; mentoring and partnering with founders to help them become better business leaders; connecting into our extensive network of experts and providing access to our proprietary sales execution platform in North America, Redwood Brands.
To date, we have invested over $120 million in over 15 drinks brands including: Stauning, one of Europe’s standout new whiskies from Denmark; Starward, a distinctive Australian whisky, exclusively matured in Australian wine barrels; Westward, a leading American single malt whiskey inspired by the Pacific Northwest’s craft beer traditions; Ritual Zero Proof, the first spirit alternative distilled in America that echoes the taste and smell of spirits; Rheinland Distillers, makers of Siegfried Gin and Siegfriend Wonderleaf, the first German non-alcoholic spirit; Seedlip, the world’s first non-alcohol distilled spirits brand, which exited into the Diageo portfolio in 2019; Belsazar, a German aperitif integrated into the Diageo portfolio in 2018; and Kikori, a Japanese rice whisky guided into the Diageo portfolio that same year.
If you have any ideas for Distill Ventures, how do people contact you?
Interested entrepreneurs are encouraged to find out more on the Pre-Accelerator page of our website. Founders can then apply through our general application form. The questions are designed to give us insight into a founder’s thinking while sparing an exhaustive interview process. We’re not worried about whether a founder is in the idea phase or if they have only started selling to a few local places — we’re most interested in learning about their vision, ambition and passions.