The facility will be the first of its kind in the beverage alcohol sector in Shanghai, with its aim to create ‘an exciting portfolio of products developed in China for China based on local consumer insights and trends’.
Construction will begin in 2021 and the R&D centre is expected to be fully operational by mid-2022.
“Today’s announcement is another key step in our transformational journey to invest and deliver growth in a fast-moving and highly competitive market,” said Sam Fischer, President Asia-Pacific and Global Travel.
“China’s total beverage alcohol market is the largest in the world in both value and volume terms; and is expected to grow over the next five years. Much of this growth will be driven by strong premiumization trends that are accelerating as new channels and occasions emerge for international spirits, beer and new- to-world innovations.
Diageo also recently opened a major logistics hub in Shenzhen.
Chinese white spirits and Scotch are both key areas for Diageo across Greater China: posting 53% and 21% growth respectively in FY20.
As with other markets, Chinese consumers are looking to ‘drink better, not more’.
A key area for Diageo is super premium and luxury Scotch whiskies: with a portfolio including Johnnie Walker (Greater China’s biggest Scotch brand by volume and retail sales value), Mortlach, Talisker, and The Singleton (Greater China’s largest single malt brand by volume).
Recent innovations include a Forbidden City Edition and limited edition Chinese New Year bottle for Johnnie Walker Blue Label – innovations that ‘combined Chinese consumers’ deep pride in their culture with their demand for unique products that suit gifting and business entertainment occasions… as well as triggering a desire to explore and learn about Scotch whisky’.