DIAGEO, the world’s biggest spirits firm, has moved further into non-alcoholic drinks after securing a majority stake in “game-changing” alcohol-free “spirit” Seedlip.

The company already held a small stake in the drinks start-up, but has significantly increased its investment as it continues to bank on the growing popularity of non-alcoholic drinks.

London-based Seedlip, which claims to be the world’s first distilled non-alcoholic spirit brand, was launched by Ben Branson in 2015 to improve options for teetotallers.

Diageo-backed accelerator programme Distell Ventures announced a minority investment in Seedlip in June 2016, but the Johnnie Walker whisky and Gordon’s gin owner has now increased its control in the fast-growing business.

READ MORE: Gin boom drives Diageo profit jump to £4bn 

It comes after Irn-Bru manufacturer AG Barr invested £1m for a 20 per cent in the Elegantly Spirited non-alcoholic adult drinks business, which owns the STRYYK brand and was formed recently by the founders of Funkin.

Seedlip produces three varieties of distilled drinks, made with botanicals, as alternatives to traditional spirits.

The brand has seen sales surge as alcohol-free alternatives gain popularity and is available in major supermarkets such as Sainsbury’s, Tesco and Waitrose, as well as cocktail bars and restaurants.

Seedlip’s three variants - Spice 94, Garden 108 and Grove 42 - are stocked in 7,500 bars, restaurants, hotels and retailers, including more than 300 Michelin Star restaurants.

Mr Branson will remain actively involved as a shareholder and director and will work with the Seedlip team and Diageo, the firm said.

READ MORE: First single malt whisky distillery in Edinburgh in 100 years to open

Seedlip is the first non-alcoholic brand acquired by Diageo through Distill Ventures.

In the last three and a half years, Seedlip has grown from its founder’s kitchen to a presence in more than 25 countries, the firm said.

Mr Branson said: “We want to change the way the world drinks and today’s news is another big step forward to achieving this.

“Distill Ventures’ and Diageo’s shared belief in our vision has enabled us to build a business that’s ready for scale and I’m excited to continue working with Diageo to lead this movement.”

Last month, Diageo revealed that annual profits jumped 9% to £4 billion, when it said it had its eyes open to growth opportunities.

John Kennedy, Diageo’s president for Europe, said: “Seedlip is a game-changing brand in one of the most exciting categories in our industry.

“Ben is an outstanding entrepreneur and has created a brand that has truly raised the bar for the category.

“We’re thrilled to continue working with him to grow what we believe will be a global drinks giant of the future.”

READ MORE: Irn-Bru buys into alcohol-free spirits firm

Shilen Patel, co-founder and non-alcoholic lead of Distill Ventures, said: “It has been a privilege to collaborate with an entrepreneur as inspiring as Ben in launching Seedlip and we look forward to watching Seedlip continue to thrive around the world.

"Supporting the vision of founders is what Distill Ventures was set up to do, and we’re proud of the impact Ben has had on our industry in such a short period of time.”

The Diageo group has around 3,500 employees in Scotland. It has 50 sites in the country, including 28 malt distilleries and one grain distillery.

Its most recent showed it had benefited from the growing popularity of gin, with its brands also including Tanqueray.

Total sales net of excise duties rose to £12.9bn in the year to June 30, from £12.2bn. Operating profits rose around 9.5% to £4bn from £3.7bn.

It said then that, after ploughing £1bn into Scotch production facilities in recent years, it expects to continue investing in the spirit in order to capitalise on booming demand in global markets.

Diageo has been in talks with unions GMB and Unite amid a pay-rise row.