It’s all the rage in the beverage industry. Celebrities are attaching their names to spirit and liquor brands, hoping they’ll pan out as major investments. However, there is also considerable risk involved.
“This is a cutthroat business and you can’t just jump in — well, you can, but you’re probably going to lose your money,” says David Klemt of nightclub.com. “You need to really be passionate about it and understand how your target market is going to react.
The Big Money Players
There’s no doubt about it. The biggest success story is Casamigos, a tequila brand founded in 2013 by George Clooney, Rande Gerber and real estate developer Mike Meldman. It took the trio just five years to see a major return on investment by selling the company to Diageo for $700 million plus a potential $300 million in performance incentives.
“When they sold it, Casamigos was only a 170,000-case brand, which is enough, but it’s pretty small in the world of the big liquor companies,” says Constantin Alexander, director of beverage for Hakkasan Restaurants in the United States. “So Diageo really just wanted to capture that and pick it up. It’s amazing, especially considering they already own Don Julio which is one of the larger luxury tequilas.”
The key for Casamigos wasn’t only the quality of the spirit, but also the authenticity of the star trio who founded it. “When they brought it to the United States, they were there from the beginning,” adds Alexander. “It wasn’t like they just hitched on and became a representative of it like 50 Cent did with Effen Vodka.”
However, it was Sammy Hagar who really kicked off the era of big-money celebrity spirit deals with Cabo Wabo. “The story is that Hagar commissioned Cabo Wabo as a house-offering for the restaurants he was involved with,” says Klemt. “He continued to grow the brand, kept nurturing it and got some attention.”
The rocker sold 80 percent of his stake in Cabo Wabo to Gruppo Campari for $80 million in 2007.
Sean “Diddy” Combs represents Ciroc, a vodka made from grapes, with a unique profit-sharing agreement that began in 2008. The star rapper, producer and entrepreneur gave new life to the spirit’s image and earned eight-figure paychecks for his efforts.
“It’s funny because Ciroc is marketed differently in the United States than in Europe,” notes Alexander. “In Europe, it’s considered more of a luxury craft brand, even though it sells well, while in the United States, it’s marketed more toward the urban segment and nightclubs. It’s a much more mass marketed brand, and a lot of that has to do with P. Diddy’s influence.”
Ciroc grew to become the number-two premium vodka in the world, behind only Grey Goose. The deal, which could be worth $100 million for Combs, helped the star top the Forbes 2017 Celebrity 100 list.
A newcomer to the celebrity name game is Aviation American Gin, which is now partially owned by Ryan Reynolds. The actor was recently seen promoting the spirit on the “Tonight Show with Jimmy Fallon” and even played a drinking game with the host, giving the brand unique exposure to a large audience on network television.
“It’s not supposed to be an amazing gin. It’s a value-oriented gin,” says Alexander. “It’s a good price point and Ryan Reynolds is great. He’s out there actively promoting it, which you don’t see a lot. Sometimes celebrities are tied to these brands and they don’t really promote them. They just let their likeness or name be used.”
Klemt agrees that Reynolds is a great spokesperson: “I think it’s really cool he went with a gin, because the standards so far have been what I call T.V.W. — tequila, vodka, whiskey — that’s what everyone seems to be jumping on.”
Reynolds invested into the company as a “significant owner” and appears to be taking the small Portland-based gin to new levels of success. Aviation says sales are up triple digits in most major markets since Reynolds came on board.
Drake meanwhile, is taking Virginia Black Whiskey public with an IPO that hopes to attract $30 million. The rapper launched the brand with spirits entrepreneur Brent Hocking in 2016.
Alexander says Virginia Black is a familiar sight in Hakkasan nightclubs around the world: “We collaborate with Drake a lot. He’s an enormous draw and whenever he comes to play, we do a lot of cross-branding and cross-marketing. We have a great relationship with his company and we use Virginia Black — a lot.
“It’s surprisingly really good,” adds Klempt. “The only disappointment is that it’s not Canadian. It was the perfect opportunity to bring a Canadian whiskey to market since he’s from Canada.”
Smaller brands are finding success as well. Klempt is a fan of George Strait’s Codigo 1530 tequila, director Stephen Soderbergh’s Singani 63 (a Bolivian spirit) and Walton Goggins’ Mulholland Distilling, which produces gin, vodka and whiskey. “The gin is similar to Hendrick’s, where it’s very cucumber-forward, but rather than the rose hips you pick up in Hendrick’s, it’s more juniper forward.”
Zeroing in on a Niche.
Nobody knows their customer-base better than Bethenny Frankel. The “Real Housewives” reality star scored big when she sold her Skinnygirl line of ready-to-drink cocktails to to Jim Beam for $100 million in 2011. The brand markets products as low-calorie with a focus on women.
“I think it’s a genius marketing move,” says Alexander. “You can call something low-calorie if it has five calories less. When I saw it come out, I just remember thinking it was great that somebody thought to do something like that with someone of that calibre behind it.”
Does he like it? “I tried it. I think it’s fine.”
Florida Georgia Line released Old Camp Whiskey, which much like the bro-country duo’s music, doesn’t seem to take itself too seriously — and perfectly fits their audience. That’s just a fun one,” says Klemt of the peach and pecan whiskey. “It’s great for shots or a shot-and-a-beer.”
Sometimes celebrity involvement just runs its course — and the image no longer matches the brand. A good example is Effen Vodka, which grew dramatically with the investment and partnership of rapper 50 Cent. However, in recent years, his role and image have been downplayed. There was even talk he was selling off his shares in the company.
“He’s not really part of the narrative when I speak with people from Effen,” says Alexander. “He opened up a lot of doors and really broke down a lot of distribution channels and the sales of the vodka skyrocketed. So they’re very happy for that. For now going forward, you see the success of Ciroc, and I think Effen is looking to angle in a different sector.”
Despite his success with Cabo Wabo, Sammy Hagar has failed to impress with his latest spirit, Santo Mezquila, a joint venture with Adam Levine that’s a cross between tequila and mezcal. “There are plenty of cocktails that involve split bases where you add mezcal and tequila together,” says Alexander. “I mean that does happen but to me, to put it together in one spirit is kind of sacrilegious. All that being said, I gave it the benefit of the doubt and tried it — and it’s a miss.”
It’s hard to find someone as stylish as David Beckham, but his Haig Club single-grain Scotch never recovered from poor reviews.
“It’s very thin,” says Alexander. “It doesn’t taste like Scotch. The packaging is pretty decent — it’s blue, almost like a perfume bottle. But it just wasn’t good. It came in, punched through the market and the distributor tried to sell it — and then quickly, nobody would buy it. It just floundered.”
The failures underscore that for a brand to be successful, it can’t thrive on celebrity recognition alone. A famous name will only get a spirit or liquor product so far. Much like a successful entertainer, a spirit or liquor company needs to understand its audience or deliver on quality — if not both.
“If the spirit is good, it could end up working,” says Alexander. “Ciroc is a really good vodka. If you take a vodka enthusiast and have them try it, they’ll love it. And if you don’t carry the Ciroc Peach in a nightclub, you’re committing liquor suicide. So granted, they have a lot of marketing power behind P. Diddy, but their products are also really good. Casamigos is a great tequila. People try it, they like it and want to have it. The fact that it’s George Clooney helps, but if Casamigos was a crappy tequila and people didn’t want to drink it, none of this would be happening right now.”