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Diageo to build R&D facility in Shanghai

Johnnie Walker owner Diageo has revealed plans for a research and development (R&D) centre in Shanghai, which will focus on creating new products for the Chinese market.

The new R&D facility is expected to be fully operational by mid-2022

The spirits giant described the forthcoming facility as ‘the first of its kind in the beverage alcohol sector’ in Shanghai.

Diageo, owner of brands including Tequilas Don Julio and Casamigos, vodkas Smirnoff and Ketel One, and rums Captain Morgan and Zacapa, saw its sales grow by 16% in fiscal 2021.

At the new site, the company will aim to continue this momentum by building a ‘portfolio of products developed in China, for China’, drawing on local market research and trends.

Sam Fischer, president, Asia Pacific and global travel, commented: “Today’s announcement is another key step in our transformational journey to invest and deliver growth in a fast-moving and highly competitive market.”

Citing data from IWSR Drinks Market Analysis, Fischer said China’s total beverage alcohol market is the largest in the world in terms of both volume and value. He explained that the market is set for growth over the next five years, led by premiumisation trends.

“Together with the recent opening of our major logistics hub in Shenzhen, this facility sets Diageo up for continued success and reinforces our strategic commitment to our business across China,” Fischer said.

The spirits giant will begin work on the new facility this year, and expects it to be fully operational by the middle of 2022.

The new R&D centre is Diageo’s latest investment in the Chinese market. In 2019, the firm established a joint venture with Jiangsu Yanghe Distillery, one of China’s largest baijiu producers.

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