Clooney and partners cash-in, but will Diageo realise the brand value of Casamigos?

Brand growth and acqusiion

Diageo Plc to acquire Casamingos brand for $US 1 Billion.

In four years, Clooney and Co have managed to create impressive brand value. Sure, they’ve achieved massive sales growth but take the people out of the brand and what are you left with? Diageo might have to find that out the hard way, over time.

Clooney and Co seemed genuinely shocked about the sale price. “If you asked us four years ago if we had a billion-dollar company, I don’t think we would have said yes,” Clooney said in a statement Wednesday.

The owner of Johnnie Walker, Smirnoff and Don Julio last will now add Casamigos to their brand portfolio. A niche founder led brand will now become part of a big corporate, but can this really work?

Brand growth acquision

Everything about Casamigos, from the philosophy, story and personality to the image is all about George Clooney and Rande Gerber. Every bottle is signed by Clooney and Gerber. Decoupling the boys from the brand makes it almost worthless.

Interestingly, the deal is made up of an initial $700 million, with the potential for another $300 million over 10 years based on the tequila’s performance.

While $700 million is still huge money, like any buy-out there is a strong recognition in the need to keep Clooney and Gerber motivated to continue to drive the brand at least in the short term.

As Diageo take over the brand it will be interesting to see how they can keep the brand’s authenticity and value, while bringing it into the corporate stable.

Diageo have valued the brand based on it maintaining the brand’s massive growth trajectory. Many in the industry are already questioning whether this is possible.

Michael Hughes

Michael is Managing Partner and Strategy Director at Truly Deeply, a brand agency with 25 years’ experience working with brands to position them for growth. His deep expertise is in unlocking the strategic power of your brand to create a differentiated, compelling and authentic brand proposition that will engage all your audiences. Michael has extensive experience working across Australia and the Middle East working with leading Australian and International organisations across just about every sector.

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