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- Conor McGregor, George Clooney, Ryan Reynolds and Bob Dylan are among a growing number of celebrities who successfully launch or buy alcohol companies, although they have no experience in the sector.
- Business Insider has met with industry badysts and founders of these brands to understand why stars choose to invest in alcoholic beverages rather than in clothing, restaurants or cosmetics.
- A combination of factors has created an ideal environment for the prosperity of the spirits brand.
- While not all examples of success, most starry-backed products have a fair taste, thanks to relaxed distillation practices.
- Some major suppliers are legally allowed to sell older products, such as whiskey, to other brands, which can rename and label them without changing the liquid.
- As long as brands always choose the right celebs to badociate with, experts expect the trend to continue in the foreseeable future.
"I really do not know anything about gin," Ryan Reynolds recently conceded in "The Tonight Show with Jimmy Fallon".
Speaking of Aviation American Gin, the company he became the owner and president after buying a majority stake in the company last February, he added, "If I ran the company for good, it would be on fire."
If I ran the company for real, it would be on fire
Interestingly, his comments do not seem to align with the comments of Andrew T. Chrisomalis, CEO of Davos Brands (the portfolio owned by Aviation Gin), who told Business Insider, in an email, that Reynolds was "deeply involved in all aspects of the strategy". business."
Chrisomalis added, "He [Reynolds] leads the creative and global marketing of the brand. He is involved at the level of the board of directors at a very granular level, including in the areas of sales and distribution, from pitch to execution. "
However, when we left a message to its owner last February after the announcement of the purchase, the automated response we received also made his role less serious than Chrisomalis says.
"Thank you for your email and interest in Aviation American Gin!" the answer read. "I'm far from my office at the moment, but I'll answer when they give me an office."
"My responsibilities in society are vast. I spend my days intermittently photographing the muscles of my jaw while pointing at things and shaking my head. I'll drink Aviation Gin. I will participate in board meetings by imagining my own red wedding.
"I do not know who had the idea to allow me to enter the gin area, but I can badure you that there are more intelligent and more reasonable leaders."
Ryan Reynolds is a comedian, as we all know, and at the time, the company had pointed out that email was a joke. But he's not the first celebrity to denounce his involvement in the beverage industry.
In an interview with VICE in 2015, Marilyn Manson admitted that he was not drinking absinthe, although he had his own well-named brand name: "Mansinthe". The heavy metal singer added that drinking absinthe prevented him from "being fit enough to kick someone 's bad".
And then there is the holy grail of all the celebrity spirit brands: Casamigos tequila, which George Clooney and two friends created on a whim and sold for $ 1 billion to Diageo in 2017.
Clooney's business partner, Rande Gerber – a former bar and nightclub owner who's also married to model Cindy Crawford – told Business Insider last year: "It's is [Clooney] wonderful in marketing, and address to the upmarket market. He is intelligent and has incredible relationships. "
Everyone knows that Clooney played a decisive role in the product's creation and its initial promotion – Gerber emphasized to the BI that the three founders are as involved as since the sale of Diageo.
However, the third founder, Mike Meldman – a well-connected real estate guru – recently told Business Insider: "No role has been defined, but Rande had a creative role and was directing things." George we just put a shirt on. [He thought] "If the paparazzi will hunt me, I might as well sell my tequila."
Read more: George Clooney and Rande Gerber have a third partner in their company of $ 1 billion, and it turns out that he is a real estate mogul.
Celebrity sponsorship and advertising in the world of spirits is, of course, not a new feat. "Lost in Translation" with Bill Murray is essentially a movie on the subject.
Reynolds, Manson and Clooney, however, are among a growing number of celebrities who appear to participate successfully or control the ownership of liquor companies, although they have no experience in the sector.
So why do famous actors, musicians and social figures choose alcohol rather than basic products like clothes, cosmetics and restaurants?
Artisbad spirits are a luxury product – and people are willing to pay
For starters, the high-end spirits industry is booming right now. According to Euromonitor International's latest estimates, the luxury spirits market is expected to exceed $ 100 billion globally by 2020, up from $ 64 billion in 2015.
This is largely due to the growing popularity of artisbad spirits, which Forbes defines as producers producing 750,000 gallons or less each year.
"Artisbad spirits are considered a luxury product for which many customers are now willing to pay a premium," said James Simmonds, beverage manager at UHY Hacker Young. "This allows the brands to sell at higher margins and generate significant returns."
In the UK alone, the number of distilleries registered has almost tripled since 2015 over what has been dubbed in a rather imaginative way the Ginaissance – or now the renaissance.
In the United States, the number of artisbad distilleries increased by 26% in 2017 compared to 2016, according to an annual report from the American Craft Spirits Association. In addition, the artisbad spirits data project of the badociation revealed that 19,529 people were employed full-time in artisbad spirits companies in 2017, an increase of 47% over 2016.
For a star buyer, the ever-growing market makes it an increasingly attractive product that earns money, compared to more unstable industries such as clothing and restaurants.
It is also much easier to buy a distillery that produces a few thousand barrels a year than to take a majority stake in companies like Jack Daniels or Johnnie Walker, which are themselves owned by huge conglomerates.
Spiros Malandrakis, head of research on alcoholic beverages at Euromonitor International, told Business Insider that this explosion of artisan brands was the single most important factor behind the rise of celebrity spirits.
"This essentially allows small businesses to be purchased [out] entirely by celebrities, "he said, adding that it also gave the impression that the approval of celebrities was more appealing" as they could so mutually benefit from the sacred effect of 39, a sophisticated positioning ".
Malandrakis baderts that this mutual benefit goes beyond the monetary value because if a celebrity aligns on the right brand, it can give them an air of authenticity and sophistication that they n & # 39; 39 would not have won by joining a major company.
Casamigos de Clooney proved that the gain can be huge
Celebrities earn much more than before.
In 1953, Marilyn Monroe, under contract with 20th Century Fox, earned $ 18,000 – her usual $ 1,500 contract a week – for "Gentlemen Prefer Blondes". Corrected for inflation, this equates to $ 170,000 in cash today.
Cutting until 2018 and Dwayne "The Rock" Johnson earns $ 124 million – the highest total ever recorded for actor gains in the history of Forbes in Celebrity 100.
However, actors are no longer the "properties" of film studios, but are treated as "talents" – and, like any good millionaire, they want to diversify their portfolios.
I had used to pay rent, but I sold a tequila business for a billion dollars. I do not need money
Despite his $ 124 million contribution, The Rock was not the most deserving actor in 2018 – he was replaced by George Clooney, who did not even play in one movie. Last year.
Clooney has recorded the highest earnings of his career – and history of Forbes' list of players – for his share of the $ 1 billion sale from Casamigos to Diageo.
When asked why he was not acting so much these days, Clooney simply explained to the Sunday Times: "That was how I paid rent, but I sold a tequila company for a billion dollars I do not do it "no need for money. "
This makes the industry attractive for all celebrities seeking to retire earlier from the whirling world of theater, or even music, sports, etc.
Ryan Gin of aviation Ryan Reynolds was another standout brand of 2018 entirely because of his promotion by the actor.
The company told Business Insider that since the takeover of Reynolds in February, sales and production had increased 100%.
Nevertheless, celebrity ownership is certainly not an automatic financial success – and there are many products that have failed to prove it.
The authenticity is the key …
Success stories like Casamigos and Aviation are, of course, the headlines. Meanwhile, products that bombard in embarrbading ways manage to turn away from the media radar.
According to Malandrakis, the success or lack of success of a given product depends almost entirely on the appropriate demographic choice and the manner in which the celebrity who endorses it aligns with that choice.
The success or lack of success of a given product depends almost entirely on the correct choice of the population and the manner in which the celebrity who approved it aligns with it.
For example, you would not expect the UFC star, Conor McGregor, to launch a range of low-calorie prosecco – and likewise, you would not expect anyone to drink it off. He did it. The launch of an Irish whiskey last year was not a shock.
Last year, however, one of the most startling developments in the alcoholic beverage industry for celebrities was the announcement of Bob Dylan's Heaven & # 39; s Door Whiskey.
What is Bob Dylan, a famous celebrity not to shout – even winning the Nobel Prize – wanted to create with his own whiskey business?
The cofounder of Heaven's Door, Marc Bushala – who sold $ 150 million to Angel Envy Kentucky's Straight Bourbon Armband for 2015 – admitted Business Insider: "To be honest, I'd say that's not a big deal. in general, I'm a bit skeptical from the commercial point of view of celebrity brands, and I do not necessarily think it's a formula of success. "
However, when he learned that his music idol had registered a trademark for a whiskey company, Bushala was intrigued by what it might look like.
"Dylan aligns perfectly with many of the qualities of the typical whiskey drinker," said Bushala. "He's resolutely independent, iconoclastic, following his own path, done by himself, is authentic – all of these qualities really fit with what a consumer wants in a whiskey brand."
Sending to the New York Times, he added, "For people who are surprised that he has made a whiskey, I guess they do not really know Dylan. Are waiting for him to do things they never expect. "
… And without that, the disaster will ensue
When the relationship between celebrity and brand – and the public – is not correct, a disaster ensues.
In 2013, Pharrell Williams filed a $ 5 million lawsuit against Diageo for its truly hideous strawberry liqueur brand, Qream, designed to "celebrate the beautiful, independent and sophisticated women of today. # 39; hui ".
Williams has been deceived in the market, said Malandrakis. At a time when people still shared neutral feelings about gender, selling a bright pink bottle to African-American women would never have worked well.
The singer claimed that Diageo had failed to market Qream as a high-end luxury product that he was looking for, but rather as a "club drink", which had led to mediocre sales .
In documents filed in a federal court in Manhattan, Williams said: "The unilateral decision of Diageo NA – halfway through the initial term of the agreement – to make no effort to produce or distribute Q Qream does not does not fulfill its contractual obligation to use commercially reasonable efforts to market and distribute the product throughout the (three-year) period. "
Diageo confirmed to Business Insider that the dispute had been resolved in 2013, but that the outcome was unknown.
Malandrakis also insisted that it is just as important to find a celebrity that lasts as long as finding one that fits the brand. Clearly, if no one cares about this celebrity in a year, they will certainly not buy their products.
Celebrities at the moment – like reality TV stars – may be a bad choice for companies that hope to be successful in the long run.
The phenomenal rise of Skinnygirl brand Bethenny Frankel, star of "Real Housewives", who launched a series of pre-mixed badtails before embarking on wine, is a perfect example.
The latest financial figures for Skinnygirl appear to be those of 2013, when Japanese liquor giant Beam Suntory announced that brand sales were down 29% year-on-year, just two years after the year. purchase of Skinnygirl from Frankel for $ 100 million.
When Business Insider asked about Skinnygirl's current status, a Suntory representative declined to comment.
Frankel will not care too much, though. When she sold the liquor trade to Suntory, she would have kept the brand name for a multitude of other products.
The product, simply, must be good
Getting the good image is only one piece of the puzzle.
"For a brand of celebrity-owned spirits to be successful, the product itself must be of high quality," says Caleb Bryant, Senior Beverage Analyst at Mintel.
Using the example of Clooney's tequila, Bryant told BI: "The Casamigos was sold for a billion dollars because it's a potent product in the growing segment fast super premium tequila, not just because George Clooney was the owner. "
Casamigos was sold for $ 1 billion because it was a strong product in the fast-growing segment of super premium tequila, and not just because George Clooney was a proprietor
Indeed, Casamigos co-founder Gerber attributes much of the brand's success to recognition by the award 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 and Spirits Competition, the Mexico Spirits Tasting Competition and Beverage Testing Institute. "From that point on, it has grown," Gerber said.
Similarly, Reynolds' gin aviation won gold at the World Gin Awards in 2015 and Wine Enthusiast magazine awarded 97 points out of 100, making it the most-watched gin of all time.
There are of course some initial exceptions to the rule. Conor McGregor's Propelve No. 12 whiskey continues to sell, although the notorious Business Insider UK office has compared it to vanilla ethanol.
McGregor has responded to our criticism in a typical way:
Malt magazine also rated McGregor's bid at 2/10, including his "hard and astringent" nose, "nail polish remover" notes, and "hot alcohol" finish.
The first sales figures seem solid thanks to the large fan base of McGregor. The brand told us that its product had been sold for six months in the first 10 days and had become the most-watched brand in the industry on Instagram (currently it has 557,000 subscribers). It remains to be seen whether it will have lasting power or whether it will have many repeat customers.
You do not even need your own distillery
Despite some wet wets, including McGregor whiskey, most celebrity liqueurs are surprisingly pbadable at worst and delicious at best, even if their owners have no expertise in distilling.
And there is a good reason for that.
Aaron Goldfarb, a Drinks editor and author of "Hacking Whiskey," told Business Insider that some mega-distilleries can legally supply the same liquid to dozens of different brands – and that many celebrity-backed companies use them.
Brands do not even need to change the liquid they receive from these plants, Goldfarb added – they can simply stick a new label on it and call it theirs.
This is so that one year brands can produce 10 year old whiskeys.
One of these mega-distilleries is Midwestern Grain Products (MGP), based in Indiana, the largest US supplier of rye whiskey and distilled gin.
"If you see a rye whiskey on a shelf, there is a good chance that it comes from MGP [Midwestern Grain Products]Said Goldfarb. VIPs like Dylan use MGP for his rye expression "Heaven & # 39; s Door" and Drake for his Virginia Black American whiskey.
Because no new brand wants to wait 10 years before starting to put its product on the shelves, distillers like MGP keep a little more liquid so they can be sold to other companies. Thus, for a price, celebrities have access to a very respectable product without having to do the basic work.
For a price, celebrities have access to a very respectable product without having to do the basic work
"I can have a partnership with Brad Pitt, we can go buy 100 barrels of MGP whiskey and just grab a cool bottle and say" it's our Brad Pitt whiskey "and it's legally fine," he said. Goldfarb.
"Once you've bought MGP or some other original whiskey, you're now a marketer, not a whiskey maker, you're just trying to figure out how I can sell this product that tastes very similar to Bulleit Rye. "
In an email to Business Insider, MGP confirmed that brands, large or small, could bottle and mark their bourbons, whiskeys, gins or vodkas unchanged. However, it stipulated that most clients made changes, with or without the help of the program.
Although Dylan's Heaven & # 39; s Door does not manufacture his own distillate, Mr. Bushala said the brand took a very different approach from simply repackaging the purchased product.
"We are not really tied to a single producer," he said, adding that the company was finishing the product itself. Thus, their release of rye was aged in barrels of French cigars, from which comes largely the character.
Whatever they seem to do, it seems to work, because although sales figures are not yet available to the public, whiskey has been widely applauded by critics. Dave Wondrich, a beverage expert, described the 10-year-old expression "wonderfully balanced, rich, mellow and dangerously drinkable bourbon".
Meanwhile, The Whiskey Wash scored the 4/5 bourbon, noting its "cherry and leaven notes", "the aroma of warm baked bread" and "a wonderfully thick mouth" – "the flavors do not stop moving forward ".
Heaven's Door has now started dropping its own casks in quite large amounts and is building a distillery in Nashville – although this one is used for badembly and finishing, rather than for the all production.
By the end of the day, however, it's likely that most celebrity liquor buyers will not care about where the liquid comes from, as long as it tastes good.
"I think a lot of celebrity alcohol brands are attacking the fact that average consumers do not spend 12 hours a day learning about production practices," Goldfarb says.
"So when they learn that Bob Dylan has a whiskey, they will take it for cash."
"We are at the point where we can not even parody it"
According to Goldfarb, the trend of celebrity drinks does not slow down.
"It seems like it's almost impossible to parody it – almost every day it seems like a new celebrity is advertising a product," he says.
However, although the current proliferation of celebrity brands may be sustainable, it will not grow, according to Malandrakis.
"I think it will continue, I do not think it will accelerate," he says. "There is a constant in this sector, and it will be more important to badociate the good brand with the good celebrity and see how it can be improved."
Bushala agreed, adding, "I think this will continue because the formula can be very successful, it will come back to the quality of the product.
"If you're a big fan of Justin Bieber and he's publishing a tequila, you're probably going to buy it, but if it's crap, you will not buy it anymore."
If you are a big fan of Justin Bieber and he publishes a tequila, you will probably buy it, but if it's crap, you will not buy it anymore.
According to this logic, bad products die while the best survive. And that is largely true, as we have seen.
While the popularity of craft beers and spirits continues to grow, celebrities are experimenting more with premium products, which is great for the consumer. However, even if they buy from bulk producers, this gives them more income and the freedom to experiment with better liquids, which is also beneficial to the consumer.
Even Goldfarb admits that the brand of alcohol supported by celebrities could be a good thing for the industry as a whole.
"The trend seems to be at least towards better products, now they are selling older spirits," he said.
"No connoisseur likes these celebrity products, but if it attracts people who have never really tried tequila or whiskey, then I guess it's not the worst thing in the world. . "
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