George Clooney between Tequila and Nespresso Coffee.
Tequila – filled nights with close allies and the hankering to have those tequila shots that are better tasting, the smoothest in the business and whose taste did not necessarily have to heighten the salt or the lime in it was how Casamigos was born. After months of tossing around ideas, then the sample was ready and it was perfect to the founders: George Clooney, Rande Gerber, and Michael Meldman. It was initially meant to be just for them and their close friends and relatives but who would have thought this Casamigos, which generally means “house of friends”, would one day have a vision of going global! So in 2013, the celebrity entrepreneurs brought it out to the public officially. There have been celebrities who formerly ventured into the entrepreneurship world as well such as Leonardo DiCaprio among others. Therefore this was not new to the artists in the entertainment industry.
Looking at the tequila today, the founders are proud to claim that it literally sold itself’ for what mattered most to them was that it was good to them and they liked it. The success of the venture was not of much meaning to them as looking at the bottle alone, not much investment was put into making it classy but the contents were what was of the essence to them. Diageo the “giant of spirits” then came across it and from the offer presented; it seems it sees huge potential in Casamigos. Upfront, $700 million in cash was put up and the promise of $300 million later after a decade of watching the performance of this fast growing brand of tequila in the global market. The founders say they never thought this idea would have been a billion dollar one!
At the opening of the transaction, Ivan Menezes the chief executive of Diageo was pleased to announce their venture into the world of tequila. The transaction plan is that it will be neutral of EPS for the first three years of the commencement of the deal after which it will become accretive. The deal is expected to come to an adjournment in the year’s (2017) second half; having funded it through cash and debts that are already in existence. Upon acquiring their commercial license, in 2016 alone, 120 000 cases were sold and a future vision to make this number 170 000 is now more evident than ever, as the brand has shown impressive growth in a very short time despite its uniqueness which is perhaps the most attractive thing about it in comparison to other tequila brands. As of the moment, Casamigos seeks to tap into the markets of the United Kingdom with a long-term goal to thereafter expand into other markets around the globe.
This venture is about to be a successful one being spearheaded by Diageo as statistics based on the industry tracker (International Wines and Spirits Record) show that tequila is rapidly climbing the ladder among the fastest – growing spirits in the world as of this given moment. This comparison was made to the broader spirits industry growing with 0.04% whereas tequila had a growth percentage of 5.3% and this was only last year (2016). Talk about a fast-growing super-premium tequila! Casamigos, therefore, has a future in Diageo. Deidre Mahlan, the president of Diageo in North America also explained his joy in partnering with this great team and expressed positive thoughts foreseen in the future of Casamigos. At the side of Tequila Don Julio, Casamigos is expected to play an interdependent role. Tastemakers, tequila experts as well as some of the most influencers in the United States have continued to give their accolades to the brand over the years, let alone the numerous awards it has already received.
The most heart-warming part of this whole transaction is the fact that the founders were very more than willing to expand their little house of friends; more so, on an international basis. Even as they seal this deal, they still want to be part and parcel to watch their “baby” grow. They want to continue in the promotion of their brand and vision. This organic approach was what was used to expand out Casamigos. The vision of this partnership intertwined with the successes we have seen Diageo put forth such as Guinness beer has the world on its toes to await to see what next for Casamigos!