Diageo Pours $1.5B into Johnnie Walker, Scotch Whisky Brands

Alcoholic beverage giant Diageo (NYSE:DEO) on Wednesday said it plans to spend 1 billion pounds ($1.55 billion) over the next five years to boost its production of Scotch whisky as demand continues to grow.

Diageo will build a major new malt distillery as part of the investment and expand a number of existing distilleries. It also plans to detail plans for a second new distillery, which it says will be built if global demand reaches certain levels.

To house the millions of additional liters of whisky expected to be produced by the expansions, the alcohol giant says it will boost capacity at warehouses.

“Over recent years our brands have achieved remarkable, sustained global growth,” Diageo CEO Paul Walsh said in a statement. “We expect that success to continue, particularly in the high growth markets around the world.”

Diageo has reported 50% sales growth over the last five years among its Scotch brands, with total sales approaching 3 million pounds this year. In 2011, Scotch represented 23% of its total volume, 27% of net sales and a third of gross profit. So far this year, Diageo has experienced 8% volume growth and 14% sales growth in the category.

Diageo’s Scotch whisky is led by popular brands such as Johnnie Walker and is exported from Scotland to ports all around the world, including Beijing and Boston.

The alcohol producer said the investment will create an estimated 100 new jobs in Scotland and up to 250 construction jobs for each year of the construction.