- Conor McGregor, George Clooney, Ryan Reynolds, and Bob Dylan are among a growing number of celebrities successfully starting or buying liquor companies, despite having no previous experience in the industry.
- Business Insider spoke with industry analysts and the founders of these brands to find out why stars were in some cases opting to invest in liquor over clothing, restaurants, or beauty products.
- Multiple factors have created the perfect environment for the celebrity liquor brand to thrive.
- While they’re not all success stories, most star-backed products taste passable thanks to relaxed distillation practices.
- Certain major suppliers are legally allowed to sell off aged products like whiskey to other brands, which can rebottle and label it without changing the liquid.
- As long as brands keep choosing the right celebrities to partner with, experts expect the trend to continue for the foreseeable future.
“I really know nothing about gin,” Ryan Reynolds recently conceded on “The Tonight Show Starring Jimmy Fallon.”
Talking about Aviation American Gin, the company he became owner and chairman of after buying a majority stake in the business last February, he added: “If I ran the company for real, it would be on fire.”
If I ran the company for real, it would be on fire.
Interestingly, his comments don’t seem to align with the words of Andrew T. Chrisomalis, the CEO of Davos Brands, the portfolio that owns Aviation Gin, who told Business Insider in an email that Reynolds was “deeply involved with all aspects of the business.”
Chrisomalis added: “He leads the creative and overall marketing of the brand. He is involved at the board level on a very granular level, including with sales and distribution – from pitch to execution.”
However, when we dropped Reynolds an email back in February last year following the news of the purchase, the automated reply we received also made his role sound less serious than Chrisomalis suggests.
“Thank you for your email and interest in Aviation American Gin!” the reply said. “I’m away from my desk at the moment but will respond the moment they give me a desk.”
It went on: “My responsibilities here at the company are vast. I’ll spend my days being photographed intermittently clinching my jaw muscles while pointing at things and nodding. I’ll drink Aviation Gin. I’ll sit in board meetings, imagining my very own Red Wedding.
“I don’t know whose idea it was to allow me into the gin business, but I can assure you, there are smarter, more reasonable people in charge.”
Ryan Reynolds is a comedian, and at the and the company has stressed to Business Insider that the email – and all of his comments – are a joke. But he’s not the first celebrity to make light of his involvement in the drinks business.
In an interview with Vice in 2015, Marilyn Manson acknowledged that he didn’t drink absinthe, even though he has his own aptly named brand: Mansinthe. The heavy-metal singer added that drinking absinthe restricted him from “being fit enough to kick someone’s arse.”
Clooney’s business partner Rande Gerber – a former bar and nightclub owner who also happens to be married to the supermodel Cindy Crawford – told Business Insider last year that Clooney was “wonderful at marketing, and caters to the high-end market.” Gerber added: “He’s smart, and has incredible relationships.”
It’s well known that Clooney was instrumental in the creation of the product and its initial promotion – and Gerber stressed to Business Insider that all three founders were as involved as ever since the Diageo sale.
But the third founder, Mike Meldman – who is a well-connected real-estate guru – recently told Business Insider: “There weren’t roles that were drawn up, but Rande had a creative role and ran things. George, we just put a shirt on. ‘If paparazzi are going to chase me, I might as well sell my tequila.'”
Celebrity sponsorship and advertising in the spirits world is, of course, no new feat. Bill Murray’s “Lost in Translation” is essentially a whole film about it.
Reynolds, Manson, and Clooney, however, are among a growing number of celebrities who seem to be finding success taking partial or controlling ownership of liquor companies despite having no experience in the industry.
So, why are famous actors, musicians, and socialites choosing liquor over endorsement staples like clothing, beauty products, and restaurants?
Craft spirits are a luxury item – and people are willing to pay
For starters, the premium spirits industry is booming. According to the latest estimates by Euromonitor International, the luxury spirits market is expected to grow to over $US100 billion globally by 2020 – up from $US64 billion in 2015.
This is largely due to the surge in popularity of craft spirits, which Forbes defines as producers making 750,000 gallons or less each year.
“Craft spirits are considered a luxury item that many customers are now willing to pay a premium for,” James Simmonds, the head of drinks at UHY Hacker Young accountants, explained. “This allows boutique brands to sell at higher margins and generate large returns.”
In the UK alone, the number of registered distilleries has nearly tripled since 2015 during what has unimaginatively been coined the Ginaissance – or now the Rumnaissance.
In the US, the number of craft distilleries jumped 26% in 2017 compared with 2016, according to an annual report by the American Craft Spirits Association. Furthermore, the association’s Craft Spirits Data Project found that 19,529 people were employed full time at craft spirits companies in 2017 – up 47% from 2016.
For a celebrity buyer, the ever-growing market makes it an increasingly appealing money-making gambit compared with more volatile industries like clothing and restaurants.
It’s also a lot easier to buy a distillery that lays down a few thousand barrels a year than it is to buy a controlling stake in the likes of Jack Daniels or Johnnie Walker, which are themselves owned by massive conglomerates.
Spiros Malandrakis, the head of alcoholic drinks research at Euromonitor International, told Business Insider that this explosion of craft brands was the biggest impetus behind the rise of celebrity spirits.
“This essentially allows for small-scale operations to be bought entirely by celebrities,” he said, adding that it also made a celebrity endorsement seem more appealing “because then they can mutually benefit from the hallowed effect of sophisticated positioning.”
Malandrakis says this mutual benefit goes beyond monetary value because if celebrities align with the right brand, it can lend them an air of authenticity and sophistication they wouldn’t have gained by partnering with a major outfit.
Clooney’s Casamigos proved the payoff can be massive
Celebrities earn a lot more than they used to.
Back in 1953, Marilyn Monroe, under contract with 20th Century Fox, made $US18,000 – her usual contracted $US1,500 a week – for “Gentlemen Prefer Blondes.” Adjusted for inflation, that’s the equivalent of $US170,000 in today’s money.
Cut to 2018 and Dwayne “The Rock” Johnson is earning $US124 million – the all-time highest total for acting earnings in the history of Forbes’ Celebrity 100.
Actors, however, are no longer the “properties” of film studios but are instead treated as “talent” – and, like all good millionaires, they want to diversify their portfolios.
Acting used to be how I paid the rent, but I sold a tequila company for a billion f—ing dollars. I don’t need money.
Despite bringing in $US124 million, Johnson wasn’t the highest-earning actor in 2018 – he came second to Clooney, who didn’t appear in a single film last year.
Clooney brought in the highest-ever earnings of his career – and in the history of Forbes’ actors list – for his share of the $US1 billion sale of Casamigos to Diageo.
It was hardly the first time Diageo dipped its toes into the world of celebrity, either – Sean “Diddy” Combs changed the fortunes of the drinks giant’s Ciroc vodka when he became the face of the brand in 2007 under a joint marketing and profit-sharing deal, helping take the “middling vodka brand being shilled by no-name former NFL players” to success, according to Zack O’Malley Greenburg, the author of “3 Kings: Diddy, Dr. Dre, Jay-Z, and Hip-Hop’s Multibillion-Dollar Rise.”
“Diddy came on and he applied his typical marketing panache and his shock-and-awe salesmanship,” Greenburg told Business Insider. “Within only a few years, Ciroc was number two in the premium vodka category, to only Grey Goose doing about 2 million cases a year.”
Forbes reports that Diddy’s $US825 million wealth is largely due to the lucrative deal.
For Clooney, when asked why he’s not acting so much these days, he put it quite simply to The Sunday Times: “Acting used to be how I paid the rent, but I sold a tequila company for a billion f—ing dollars. I don’t need money.”
That certainly makes the industry look attractive to any celebrity looking to make an early exit from the whirlwind world of acting or indeed music, sport, and so on.
Reynolds’ Aviation Gin was another standout brand of 2018 entirely because of its promotion by the actor.
The company told Business Insider that since Reynolds’ takeover in February, both sales and production had increased by 100%.
Still, celebrity ownership certainly doesn’t make for automatic financial success – and there are plenty of failed products to prove it.
Authenticity is key …
Success stories like Casamigos and Aviation are, of course, the ones that make the headlines. At the same time, the products that bomb in embarrassing fashion manage to fall off the media’s radar.
According to Malandrakis, the success or lack of success of a certain product comes down almost entirely to the correct choice of demographic and how the celebrity who’s endorsing it aligns with it.
The success or lack of success of a certain product comes down almost entirely to the correct choice of demographic, and how the celebrity who’s endorsing it aligns with it.
For instance, you wouldn’t expect the UFC star Conor McGregor to launch a line of low-calorie prosecco – and, likewise, you wouldn’t expect anyone to drink it if he did. Launching an Irish whiskey last year, meanwhile, came as no shock.
One of the most surprising developments in the celebrity liquor business last year, however, was the announcement of Bob Dylan’s Heaven’s Door whiskey.
What did Bob Dylan, a celebrity known for not giving a damn about anything – even winning the Nobel Prize – want with his own whiskey company?
“To be honest I would say generally I’m a little bit sceptical from a business standpoint of celebrity brands,” the Heaven’s Door cofounder Marc Bushala – who sold the bourbon Angel’s Envy to Bacardi for $US150 million back in 2015 – acknowledged to Business Insider. “I don’t necessarily think that is a formula for success.”
But when he heard that his music idol had registered a trademark for a whiskey company, Bushala was intrigued as to what that might look like.
“Dylan lines up perfectly with a lot of the qualities of the typical whiskey drinker,” Bushala said. “He is staunchly independent, iconoclastic, follows his own path, self-made, authentic – all these qualities really line up with what a consumer wants in a brand of whiskey.”
Speaking with the New York Times, he added: “For people who are surprised that he did a whiskey, I guess they don’t really know Dylan. People who know him expect him to do things they would never expect.”
… and without it, disaster ensues
When the relationship between the celebrity and the brand – and audience – isn’t right, however, disaster ensues.
In 2013, Pharrell Williams sued Diageo for $US5 million over his thoroughly hideous-looking brand of strawberry liqueur, Qream, which was intended to “celebrate the beautiful, independent, and sophisticated women of today.”
Williams got the market wrong, Malandrakis said. In a time when people were, and still are, embracing gender-neutral sentiments, having a bright pink bottle marketed at African-American women was never going to go down well.
The singer claimed that Diageo failed to market Qream as the high-end, luxury product that he wanted and instead marketed it as a “club drink,” which led to its poor sales.
“Diageo NA’s unilateral decision – halfway into the initial term of the agreement – to put no effort in producing or distributing Q Qream fails to meet its contractual obligation to use its commercially reasonable efforts to market and distribute the product throughout the (three-year) term,” Williams said in papers filed in a Manhattan federal court.
Diageo confirmed to Business Insider that the dispute was resolved in 2013, though the outcome is unknown.
Malandrakis also stressed that finding a celebrity with longevity was as important as finding one who aligns with the brand. To put it bluntly, if no one cares about that celebrity in a year’s time, that celebrity is unlikely to move many products.
Flavour-of-the-moment celebrities – like reality-TV stars – can therefore be a bad fit for companies hoping for success in the long term.
The meteoric rise and fall of the “Real Housewives” star Bethenny Frankel’s Skinnygirl brand, which launched a series of premixed cocktails before venturing into wine, is a perfect example of this.
The latest financial figures for Skinnygirl seem to be from 2013, when the Japanese booze giant Beam Suntory announced that the brand’s sales were down by 29% year-on-year – just two years after buying Skinnygirl from Frankel for a reported $US100 million.
When Business Insider asked about the current status of Skinnygirl, a representative from Suntory declined to comment.
Frankel won’t mind too much, though. When she sold the alcohol business to Suntory, she reportedly retained the brand name to use for a whole host of other products.
The product, quite simply, has to be good
Getting the branding right is just one piece of the puzzle.
“For a celebrity-owned spirit brand to succeed, the product itself must be high quality,” says Caleb Bryant, a senior beverage analyst at Mintel.
“Casamigos was sold for $US1 billion because it was a strong product in the fast-growing super-premium tequila segment, not just because George Clooney was an owner,” Bryant told Business Insider.
Casamigos was sold for $US1 billion because it was a strong product in the fast-growing super-premium tequila segment, not just because George Clooney was an owner.
Indeed, the Casamigos cofounder Gerber credits much of the brand’s success to its recognition from awards panels. The brand has won gold medals at the Los Angeles International Spirits Competition, the San Francisco World Spirits Competition, the New York World Wine & Spirits Competition, and the Spirits of Mexico Tasting Competition and from The Beverage Testing Institute. “From then on it gained momentum,” Gerber told us.
There are, of course, some initial exceptions to the rule. McGregor’s Proper No. Twelve whiskey continues to sell out despite being panned by Business Insider’s UK office, which likened it to vanilla-flavored ethanol.
McGregor responded to our review in typical fashion:
Malt magazine also scored McGregor’s offering at a 2 out of 10, picking out, in particular, its “harsh and astringent” nose, “nail varnish remover” notes, and a finish of “alcohol rub heat.”
Initial sales figures look strong thanks to McGregor’s sizable fan base. The brand told us that it sold through six months’ worth of product in the first 10 days on the shelves and became the industry’s most followed brand on Instagram (now 557,000 followers and counting). Whether it has lasting power – or will have many repeat customers – remains to be seen, however.
You don’t even need your own distillery
Despite the odd damp squib – notably, McGregor’s whiskey – most celebrity liquors are surprisingly passable at worst and delicious at best, even though their owners have no expertise in distillation.
And there’s a good reason.
Aaron Goldfarb, a drinks writer who is the author of “Hacking Whiskey,” told Business Insider that certain mega-distilleries could legally supply the same liquid for dozens of different brands – and many of the celeb-backed companies are using them.
Brands don’t even have to change the liquid they receive from these factories, Goldfarb added – they can just slap a new label on it and call it their own.
This is how one-year-old brands are able to produce 10-year-old whiskeys.
One such mega-distillery is the Indiana-based Midwestern Grain Products, the largest US supplier of rye whiskey and distilled gin.
“If you see a rye whiskey on the shelf, there’s a really good chance that it came from MGP,” Goldfarb said. MGP is used by celebrities like Dylan for his Heaven’s Door rye expression and Drake for his Virginia Black American Whiskey.
Because no new brands want to wait 10 years to start putting their product on the shelves, distillers like MGP keep a little extra liquid to sell off to other companies. Thus, for a price, celebrities have access to a very respectable product without having to do any of the groundwork.
For a price, celebrities have access to a very respectable product without having to do any of the groundwork.
“I can have a partnership with Brad Pitt, we can go buy 100 barrels of MGP whiskey and just get a cool bottle and say ‘this is our Brad Pitt whiskey,’ and that’s legally fine,” Goldfarb said.
“Once you buy MGP or other sourced whiskey, now you’re a marketer, not a whiskey maker. You’re just trying to figure out how I can sell this product that tastes pretty damn similar to Bulleit Rye.”
In an email to Business Insider, MGP confirmed that brands – large or small – could bottle and brand its bourbons, whiskeys, gins, or vodkas without modification. It stipulated, however, that most clients did make some kind of alterations, with or without MGP’s assistance.
While Dylan’s Heaven’s Door doesn’t make its own distillate, Bushala said the brand took a very different approach from just rebottling a sourced product.
“We’re not really tied to a single producer,” he explained, adding that the company finished the product itself – its rye release, for instance, was aged in French cigar barrels, which is where much of the character comes from.
Whatever they’re doing seems to be working, as, though sales figures are not yet publicly available, the whiskey has been widely lauded by critics. The drinks expert Dave Wondrich called the 10-year-old expression “a wonderfully balanced bourbon, rich and chewy and dangerously drinkable.”
The Whiskey Wash scored the bourbon 4 out of 5, identifying “hints of cherry and sourdough,” an “aroma of warm baked bread,” and “a wonderfully thick mouthfeel” – “the flavours keep coming and coming,” it said.
Heaven’s Door has now started laying down barrels of its own in pretty significant quantities, and is building a distillery in Nashville, Tennessee – though this will be used for blending and finishing, rather than for the entire output.
At the end of the day, though, chances are most people who buy celebrity booze don’t care that much about the liquid’s origins as long as it tastes good.
“I think a lot of the celebrity alcohol brands are preying on the fact that average consumers don’t spend 12 hours a day reading about production practices,” Goldfarb said.
“So when they hear Bob Dylan has a whiskey, they will take that at face value.”
‘It’s getting to the point where you can’t even parody it’
According to Goldfarb, the celebrity-drinks trend is not slowing down.
“It feels like it’s almost getting to the point where you can’t even parody it – almost every single day it seems like a new celebrity is announcing a product,” he said.
But while the proliferation of celebrity spirit brands may be sustainable, it’s not going to get any bigger, according to Malandrakis.
“I think that it will continue – I don’t think it will accelerate,” he said. “There’s a constant within this industry, and it will be more about pairing the right brand with the right celebrity and how that can be improved.”
Bushala agreed, adding: “I think it’s going to continue because it can be a very successful formula. It will come back down to the quality of the product.
“If you’re a huge Justin Bieber fan and he releases a tequila, you’re probably going to buy it, but if it’s crap, then you won’t buy it again.”
If you’re a huge Justin Bieber fan and he releases a tequila, you’re probably going to buy it, but if it’s crap, then you won’t buy it again.
By this logic, bad products die off while the best survive. And this is largely true, as we’ve seen.
As craft beers and spirits continue to grow in popularity, celebrities are experimenting more with higher-quality products, which is great for the consumer. But even if they buy from bulk producers, it gives those distilleries more revenue and freedom to experiment with better liquids – which is also great for the consumer.
Even Goldfarb concedes that the celebrity-backed booze brand may be a good thing for the industry on the whole.
“The trend does seem to be towards better product at least, now they’re selling aged spirits,” he said.
“No connoisseur likes these celebrity products, but if it’s getting people that have never really tried tequila or whiskey into them, then I guess it’s not the worst thing in the world.”