Diageo’s Indian arm, United Spirits, has made key investments in India’s evolving drinks sector, backing two start-ups focused on non-alcoholic and coffee-infused beverages. These strategic moves reflect a broader shift in consumer preferences toward innovative and health-conscious drink options.

V9 Beverages pioneers India’s sober spirits

United Spirits has acquired a 15% stake in V9 Beverages, a New Delhi-based company that has made a name for itself with its Sober brand. Founded in 2020, V9 Beverages set out to create India’s first line of distilled non-alcoholic drinks, offering alcohol-free alternatives to gin, whiskey, and rum. The Rs22.9 million (£212,345) investment marks a significant endorsement of the brand’s potential by one of the biggest players in the beverage industry.

Vansh Pahuja, founder of V9 Beverages, said the deal would allow the company to expand its international reach, leveraging Diageo’s established distribution network. “We are very excited to be part of Diageo’s portfolio,” Pahuja said. “With this investment we hope to expand our global footprint and take our journey of India’s first non-alcoholic spirit to the world.”

As more consumers seek healthier lifestyle options, non-alcoholic drinks are gaining ground. V9 Beverages aims to lead the category in India by offering products that retain the sophistication and flavor profile of traditional spirits—without the alcohol content.

Strategic investments fuel innovation

This partnership is part of United Spirits’ broader strategy of making “strategic minority investments” in promising start-ups. The idea is to tap into emerging trends without taking full ownership, allowing the company to observe market dynamics and support early-stage innovation.

The approach reflects Diageo’s global efforts to stay at the forefront of changing consumer tastes. By backing start-ups like V9 Beverages, United Spirits gains insights into the non-alcoholic segment while also nurturing the local drinks ecosystem.

The Sober brand, with its focus on distilled alternatives to traditional spirits, offers United Spirits a new way to engage with health-conscious and younger drinkers, many of whom are actively reducing their alcohol intake.

Cold-brew coffee liqueurs attract attention

In addition to its investment in non-alcoholic drinks, United Spirits has also acquired a 25% stake in Indie Brews & Spirits, a company known for its cold-brew coffee liqueur brand Quaffine. The Rs50 million (£463,503) investment signals United Spirits’ interest in the fast-growing coffee liqueur category in India.

Cold-brew and coffee-infused spirits have gained popularity in recent years, with more than 20 artisanal coffee brands launching across the country. These beverages cater to a growing segment of consumers looking for premium, craft-inspired alternatives that offer complex flavor experiences.

Indie Brews & Spirits taps into this trend by combining the bold flavors of cold-brew coffee with alcohol, creating a modern liqueur that appeals to both coffee lovers and cocktail enthusiasts. The partnership with United Spirits will help the brand scale its production and distribution to meet increasing demand.

Diageo’s vision for emerging markets

Hina Nagarajan, Managing Director and CEO of Diageo India, confirmed that both investments had been approved by the company’s board. She explained that these moves align with the company’s strategy of exploring “new growth engines” and tapping into evolving market trends.

“These strategic minority investments allow us to experiment in the emerging consumer trends of the non-alcohol and coffee liqueur category,” said Nagarajan. “We will explore appropriate mechanisms to enhance market reach of these brands and support in other areas of planning and business growth.”

By investing in these innovative start-ups, United Spirits is not just expanding its product range but also reinforcing its commitment to staying ahead of the curve in an increasingly competitive and dynamic industry. The company’s strategy is clear: support innovation, monitor trends, and align with shifting consumer values—whether that means offering alcohol-free spirits or capitalizing on the rise of premium coffee liqueurs.

As India’s beverage market continues to diversify, United Spirits’ targeted investments could set the stage for a new era of consumer choice—one where taste, quality, and health-consciousness go hand in hand.