Celebrity Spirits
Tequila is having a moment. But at what price?
Over the years, celebrities have started or acquired businesses in a variety of industries. At times, the stars were looking to monetize their fame. Some were looking for an outlet to boost their personal brand. Others, of course, just wanted a vanity project.
The idea of celebrity brands is nothing new. TV, movie, and music stars have owned and promoted everything from dog food (Rachel Ray, Ellen Degeneres), restaurants (Robert De Niro, Michael Jordan), and clothing (Jessica Simpson, Kate Hudson, Sarah Jessica Parker).
Over the years, a few have flopped, but many of them have done quite well. For instance, in 2019, Kylie Jenner sold a majority stake in her cosmetics company to Coty for $1.2 billion. Not bad for a 22-year-old.
But a new segment is particularly hot right now: Wine and spirits. It makes sense. The highest end of the market — the luxury brands priced $200 per bottle and higher, where many celebrities are vying — is the fastest growing segment in the $1 trillion global wine and spirits industry. Consider this: Luxury brands are expected to grow 9.3% per year between now and 2025, while the market for alcohol at $10 or below is projected to grow .8% per year.
The glitterati is buying and launching products across categories. In wine, for instance there is Miraval by Angelina Jolie and Brad Pitt, Sun Goddess Wines by Mary J. Blige, Invivo wines by Sara Jessica Parker, and Hampton Water by Jon Bon Jovi, to name a few. Jamie Foxx, Bob Dylan, and Conor McGregor have whisky brands. Jay-Z and 50 Cent make and sell champagne. Kate Hudson and Channing Tatum have vodka lines. Mariah Carey has an Irish cream liqueur, and even Danny DeVito has a Limoncello, of course.
But, above all, celebrity tequila is definitely having a moment. Nick Jonas, Kendall Jenner, Dwayne “The Rock” Johnson, AC/DC, Adam Levine, Justin Timberlake, Kendall Jenner, Toby Keith, Carlos Santana, and, perhaps the most entrepreneurial star of them all, Sean Combs have tequila brands. The list goes on, but the point is made.
Tequila is particularly tempting to celebs for at least three reasons. First, it’s an incredibly fast growing market with nearly unlimited global demand, so the odds of success are relatively high. According to IWSR, last year, agave-based drinks grew 15.9% to become the third most popular spirit, behind vodka and whisky. The backing of a celebrity also helps. From 2018 to 2019, liquors backed by influencers surged 31.7% by volume.
Tequila also doesn’t require years of aging like other spirits. Some Blancos are bottled immediately and Añejos can be aged up to 3 years. So it’s a good choice for those looking for both a vanity project and instant gratification.
Finally, tequila also has gained a reputation for giving celebs a very handsome exit. In 2017, George Clooney sold the Casamigos brand he launched with entrepreneurs Rande Gerber and Mike Meldman for $1 billion. Some speculate that The Rock’s tequila, which launched just last year, could fetch $2 billion.
So, while many are in it for the money (or more fame), this doesn’t mean that the quality isn’t good or they aren’t worth the money. There is nothing to complain about with a glass of Miraval by the pool. Wild Turkey Longbranch bourbon (Matthew McConaughey) is a solid everyday dram at a good price.
My advice on this and many other matters: Enjoy what tastes good to you and what responsibly fits your budget, and disregard the label, marketing campaign, or celeb behind the label.
Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.
