Heidi Dillon was appointed CEO of Distill Ventures (DV) last month, the Diageo-backed independent drinks accelerator whose investments include Westward Whiskey, Ritual Zero Proof, and ready-to-drink cocktail Vervet, among others.
As managing director, Dillon has guided the business’ U.S. growth since 2020, most notably leading the company’s non-alc practice, as well as developing and launching the Pre-Accelerator, an early stage investment initiative which has delivered over $10 million globally into 19 diverse founders and 16 drinks brands. We chatted with Dillon about what makes DV say “yes” to a founder, where she believes the non-alc category is headed, and what key tenets create successful growth plans. Answers have been lightly edited for clarity and length.
What attributes make a DV candidate stand out?
At DV, our work is all about founders – and while the brand DNA is important, we know the ‘secret sauce’ often lies in our founders’ distinct visions and desires to reach a global scale. Our work – both through our Pre-Accelerator and our Accelerator is designed to meet founders where they are, so we work with all stages of business, from pre-liquid to scale. We’re passionate about discovering and supporting founders that come from diverse and dynamic backgrounds who are looking to disrupt the world of drinks. Ultimately, we look for brands that are ambitious and have the potential to truly evolve the drinks business, with the foundational principles built to scale a business with focus and rigor that can meet an evolving consumer.
How does the application process differ from the pre-accelerator to the accelerator?
We actually think of both investment tracks as part of the same holistic process and we invest in and partner with businesses in all stages of development – from infancy to category leaders. What we really look at is how far along these founders are in their journey. For those who might be pre-liquid or pre-launch, they are often a best fit for our Pre-Accelerator, which is focused on smaller investments, more flexibility, and a shorter program. Our Accelerator tends to fit more naturally with brands who have begun to nail down their product quality and proposition, including occasion and serve strategy, consumer groups and insights, and commercial opportunity and drivers.
Where do you see the non-alcoholic category going and, at this point, what would make you say “yes” to adding another non-alc brand to DV’s portfolio?
Since 2017, we have had a dedicated non-alc division, and even before then, we had already partnered with Seedlip, the world’s first non-alcoholic spirit. Today, over 25% of our portfolio operates in this space, and we will continue to work closely to develop this promising category. For us, the growth of non-alc is a natural consumer evolution — we continue to see a shift with consumers being more wellness-oriented as well as a continued curiosity with flavor, experience and moderation. Today, non-alc has finally caught up. We’re at a true crossroads, in that it’s no longer about “without” but rather “with.” We now see products that offer new functional ingredients and non-alc analogs that can effectively mimic the taste and mouthfeel of spirits. Non-alc is no longer a trade-off, it’s an elevated experience that can fully compete with a spirited one. We are absolutely continuing to watch and invest in the space.
Do current economic conditions and their impact on the investment environment shift how DV is coaching companies?
DV has become an integral part of Diageo’s acquisition and growth strategy, and our partnership remains stronger than ever. We’re ambitious and very excited to continue to create the drinks portfolio of the future. From a coaching and founder perspective, our portfolio has made it through recessions, the COVID-19 pandemic, and many other micro and macro economic conditions. We look at the long-term life cycles of brands and how we continually connect with consumers to support founders to keep their business trajectory on a path of forward momentum.
What are some of the most common misconceptions entrepreneurs have about a business growth strategy?
An overarching structure we always support founders with is: to set clear objectives, understand what and how to measure those, and be open to testing, learning and adapting all while remaining focused. As a founder, there are so many opportunities that are always coming your way, and it’s tempting to take on all of those. While the journey of being an entrepreneur is not linear, maintaining a clear path to establish the drivers that help your brand to grow and expand is critical.
As CEO what will be your strategic priorities for Distill Ventures?
As I lead the company into the next decade, our business will remain focused on guiding our current portfolio brands through scaling challenges and opportunities as they enter growth stages, as well as building the drinks portfolio of the future. DV’s core principles will still be focused on developing and utilizing outstanding partnerships, staying at the heart of global drinks culture, maintaining a team comprising the highest caliber experts in the world, influencing the course of the industry, executing with excellence, and leveraging DV’s outstanding partnership with Diageo to drive value for all.
Importantly, we will continue to double down on driving diversity across the industry, supporting brands championing grain-to-glass production techniques and sustainability initiatives, as well as investing in new and emerging categories and consumer lifestyle occasions.