5 MINUTES wITH EUGENE KHABENSKY
Eugene leads venture investments globally for Diageo, and is responsible for the Distill Ventures program, an industry-leading Diageo-backed accelerator. We gain his insights on what makes a craft spirit investible, top tips for distillers who are looking to take their business top the next level, and whether a sustainable story is a top criterion for investors.
Beyond Distill Ventures, Diageo also has an open innovation program called Diage Sustainable Solutions, which supports new technologies and partners with start-ups in developing pioneering sustainability solutions.
VICE PRESIDENT OF GLOBAL VENTURES AT DIAGEO
“We meet hundreds of founders and brands every year with only a small percentage receiving investment. My top tip to brands would be to highlight what makes them unique vs. others in the market. Also, there is great power in being focused and targeted. ”
What qualities do you consider essential for an investible drinks start-up?
“Several factors are crucial, including the founders and team, the brand's uniqueness and organic consumer pull. Also very important is the category and growth potential of that space, the business' overall commercial and financial performance, total profit pool, scalability and sustainability.”
What is your key advice for craft spirit distillers starting their investor pitch process?
“Before raising capital I think there are some basic questions any brand owner should ask themselves - What are my long and short-term goals? What are my expectations of an investor and how will I evaluate potential partners? What is my timeline? How much money do I need and what will I use it for? Also, what makes me an attractive investment? One mistake is owners go too wide and not deep enough - in other words their business plans focus o n too many markets, SKUs, or initiatives and spread themselves too thin in the process. There is great power in being focused, targeted, and prioritizing.”
Is sustainability a key factor when evaluating potential partnerships with drink brands?
“Yes, definitely. Our ambition is to be the best performing and most trusted corporate venture team in CPG (consumer packaged goods). To do this, our strategy is closely aligned with and in service of Diageo's Strategy and Society 2030: Spirit of Progress plan. We have what we call "hunting grounds' that we are regularly updating based on our strategy and the trends we see. Right now, spirit brands with sustainability as a key differentiator and a core part of their USP, are one of the focus areas for us. In particular, we would like to see more brands that can grow sustainably with packaging innovation solutions.”
Apart from funding, spirit brands that The Oxford Artisan have been backed by Distill Ventures are also provided with 'mentorship'. Does this include embracing sustainability as part of their brand's processes?
“Yes, it does. Following investment, Diageo and Distill Ventures provide through groundbreaking support, mentorship, and expertise to all companies within our portfolio. This includes helping them achieve a more efficient and sustainable supply chain. Most of the companies in our portfolio have not disclosed their relationship with Distill Ventures publicly, so we cannot speak to specifics. However, we are proud to say many of our companies have taken some great steps and several have achieved B Corp certification while being a part of theDistill Ventures program.”
In 2022, as part of Distill Ventures, Diageo made a minority investment in the Oxford Artisan Distillery.
Oxford Artisan produces sustainability as part of their brand's whisky using biodiverse 'heritage grains grown through groundbreaking restorative farming techniques. Grain is a key way whisky
producers are developing new styles and flavours and they produce a distinctive and great-tasting product. It fits perfectly with our strategy to support premium and environmentally responsible brands.
