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India’s spirits landscape is undergoing a seismic shift. As consumers increasingly seek authenticity and premiumization, global beverage giants are racing to capture the hearts—and palates—of a new generation. Diageo India’s (United Spirits Limited) acquisition of NAO Spirits, the trailblazing craft distiller behind Greater Than and Hapusa gins, is a bold move that signals the next chapter for India’s premium spirits industry.
Why This Acquisition Matters Now
The $15.2 million (INR 130 crore) deal gives Diageo India a 97.07% controlling stake in NAO Spirits, with plans to reach full ownership in a two-step transaction. NAO Spirits, founded in 2017 by Anand Virmani, has become synonymous with India’s craft gin renaissance, leveraging native botanicals and a distinctly local narrative to capture a 4.6% share of the Indian gin market.
“With NAO Spirits, we see an opportunity to scale a homegrown success story and offer consumers high-quality, locally crafted alternatives in the premium segment,” said Praveen Someshwar, MD and CEO, Diageo India.
The Strategic Rationale: Premiumization and Local Authenticity
Premiumization is the new battleground. Rising disposable incomes and evolving consumer tastes have fueled demand for artisanal, small-batch spirits. NAO’s flagship brands—Greater Than (India’s first craft gin) and Hapusa (one of the few gins globally made with wild Himalayan juniper)—have set new standards for quality and innovation. The recent launch of Pipa, an aged, spiced rum, demonstrates NAO’s ambition to diversify and lead in premium segments.
Diageo’s playbook:
Synergy: Diageo brings a robust distribution network, production scale, and global best practices. NAO contributes local expertise, brand authenticity, and innovation.
Portfolio depth: The acquisition strengthens Diageo’s premium offerings, adding a “Made-in-India” edge to a portfolio that already includes global icons like Johnnie Walker and Tanqueray.
Market reach: NAO’s products, previously concentrated in urban centers and premium outlets, can now leverage Diageo’s 1,500+ distribution points across India, accelerating growth.
Industry Context: Craft Spirits on the Rise
India’s craft spirits segment is crowded with new entrants and M&A activity. Major players are either acquiring startups or launching their own craft brands to tap into consumer demand for local provenance and innovation. NAO’s rapid ascent and now its absorption into Diageo’s portfolio validate the growing importance of this segment.
“As consumers shift towards experimentation, repertoire, and casual drinking occasions, demand for local yet authentic, craft-oriented brands is on the rise. NAO Spirits’ brands are well placed to cater to these evolving trends,” Someshwar noted.
Business Implications for F&B Leaders
Restaurant and hospitality buyers: Expect broader availability and potentially more competitive pricing for NAO’s craft spirits, with Diageo’s backing ensuring reliability and scale.
CPG marketers: The deal exemplifies how global brands can localize portfolios to resonate with modern Indian consumers, blending heritage with innovation.
Culinary innovators: NAO’s use of indigenous ingredients and experimental spirits offers new pairing and menu opportunities, especially as premiumization drives up-margin beverage sales.
What’s Next?
With Anand Virmani staying on as CEO, NAO Spirits will retain its creative DNA while benefiting from Diageo’s operational muscle. The acquisition is expected to unlock new avenues for R&D, export, and category expansion—positioning Diageo to lead India’s premium spirits wave.
In summary: Diageo India’s acquisition of NAO Spirits is more than a financial transaction—it’s a strategic bet on the future of Indian craft spirits, where authenticity, innovation, and premiumization converge. For industry stakeholders, this marks a pivotal moment to watch, learn, and potentially emulate.
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Written by Michael Politz, author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), and founder of Food & Beverage Magazine, the leading online publication and resource for the food, beverage, and hospitality industries. Politz is also the designer of the Bluetooth logo, was named to Entrepreneur Magazine’s Top 40 Under 40 for his company American Wholesale Floral, and is the founder of the Proof Awards and the CPG Awards. He is a partner in numerous consumer brands and a recognized thought leader in the business of hospitality.
