(Photo: Diageo)
On Wednesday, Just Drinks reported that Crown Royal Whisky has paused construction of a CA $245 million (US $175.7 million) distillery in the St. Clair Township of Canada.
Plans for the facility were first unveiled in 2022 as part of Diageo's "Spirit of Progress" sustainability plan. The project was slated to contain carbon-neutral distilling, blending and warehouse operations situated on 400 acres of industrial-zoned land. According to early reports, the facility was set to replace all of Diageo's existing manufacturing operations in the country.
Those plans are now "indefinitely" delayed as Crown Royal pivots back to its main distillery in Gimli, Manitoba.
“Given the dynamic nature of our broader business and our emphasis on productivity, we have decided to pause the development of our facility in Lambton County’s St Clair Township," Crown Royal owner Diageo said in a statement distributed to news outlets on Wednesday. "We will be revisiting plans and timeline at a later date, as part of our regular review of investments and priorities across our supply chain footprint.”
Crown Royal, by all accounts the best-selling Canadian whisky in the world, has been hot off a string of releases throughout 2024. In addition to its highly-anticipated Blackberry flavor, the brand uncorked its inaugural Single Malt, a nearly $600 31-year Blended Whisky and a pre-batched Cherry Sour cocktail. The brand benefits from enormous popularity both within and outside of its home country, reporting sales of 7.7 million liter cases worldwide in 2023.
Locals in St. Clair were eager to get a slice of the pie. According to projections from Diageo, the facility's construction was expected to employ around 400 tradespeople. The finished distillery was slated to create 50 to 75 full-time jobs and produce up to 20 million liters of absolute alcohol annually.
St. Clair Mayor Jeff Agar says the township was notified of the pause during a Zoom meeting with Diageo executives last week.
“They didn’t give an explanation,” Agar told The Independent. “But they are not selling the property and, who knows – it’s hard to say what they are thinking – hopefully they will still come.”
It's the latest in a series of business moves as Diageo expands, rolls back and sells off large swathes of its portfolio. Like many spirits companies, the British firm has experienced a rough fiscal year attributed to trade headwinds and COVID-19 aftershocks. After the company hit a four-year stock low in July, Diageo immediately set to work on reorganizing its priorities.
Over the past few months, the firm has trimmed its catalog with the sale of Pampero Rum, Safari Liqueur and subsidiary Guinness Nigeria. It also sought to sell popular gin liqueur brand Pimm's but was unable to find a buyer. The Spirits Business reports that the brand has since been taken off the market.
In other areas, Diageo has been growing faster than ever. The company announced a $120 million distillery in the Yunnan Province of China earlier this week said to reflect its "confidence in the future of Chinese whisky." No- and low-alcohol products have also emerged as a hot opportunity, evidenced by Diageo's September acquisition of Ritual Zero-Proof, the largest nonalcoholic spirits producer in America.
What will come of the St. Clair Crown Royal distillery is yet to be seen. Diageo still retains ownership of the 400-acre lot and, according to locals, was eager to build on it until quite recently.
“We don’t have a lot of details,” township CAO John Rodey added. “Apparently they’ve looked globally and don’t think it’s the time to start construction. The funny thing is that in the last month, they’ve provided all the information we needed for the site plan."
