Thursday, 13 December, 2018

Bacardi to buy premium tequila maker Patron in $5.1 billion deal

Patrón has been building momentum with a steady pipeline of line extensions in its core tequila business Patrón has been building momentum with a steady pipeline of line extensions in its core tequila business
Nellie Chapman | 26 January, 2018, 09:53

DeJoria co-launched Patron almost 30 years ago and is also the co-founder of the hair care company John Paul Mitchell Systems.

Bermuda-based Bacardi, which already sells Cazadores tequila, accounted for 5.8 percent of the total alcoholic beverage market previous year, research firm IRI's data showed. With this move, Bacardi becomes the leader in the super-premium segment in the U.S.

The acquisition deal with Bacardi paved the way to tequila's status as the primary product in the global market for spirits.

One of the world's largest distillers, Diageo, recently bought, Casamigos for $1 billion, or about $6,000 per case.

Patrón Spirits International is known for its premium tequila, packaged in distinctive dome-shaped bottles.

As a spirit, tequila has seen rapid sales growth over the last 15 years.

According to Bloomberg, agave-based spirits, such as tequila and mezcal are enjoying a huge boom in sales, compared to other spirits like vodka or rum, which I think probably tells you a lot about the current state of the world, really.

Patron, an early pioneer in the market for upscale tequila, was founded by John Paul DeJoria and Martin Crowley in 1989.

This new partnership will start in Los Angeles during the NBA's all-star weekend.

The U.S. market accounts for most tequila sales. The Cuban-born, Puerto Rican-raised company continues to diversify into certain categories including aged (batch strength) bourbons and whiskeys, and consumers are spending more on these commodities as well.

The acquisition deal will also make Bacardi the top company spirits player in the super-premium segment in the US and the second largest spirits company in market share by value in the USA, according to the latest data from IWSR, a London-based authority on the drink trade.