Brown-Forman Bails on Vodka 🍸

Author

CPG WIRE
June 20, 2023

GM and and welcome back to This Week in CPG. Today’s newsletter is slightly truncated due to the federal holiday yesterday, but we still have lots to cover.

Here’s what we’re getting into:

  • Brown-Forman sells Finlandia 🍸

  • Tony’s Chocolonely’s closes round 🍫

  • Beam Suntory enters the mezcal biz 🔥

  • Rocky’s Matcha opens permanent space 🍵

  • RTD tea volume down 📉

The Big Story đź“°

Brown-Forman has officially exited the vodka business.

Yesterday, the Louisville-based spirits firm announced that it’s selling Finlandia Vodka for $220m. The buyer is Coca-Cola Hellenic Bottling Company, a European strategic bottling partner of Coca-Cola that was originally founded in Greece, but is now based in Switzerland.

Brown-Forman bailing on vodka shouldn’t come as a major surprise. Finlandia is no doubt a successful brand — it’s a top-selling vodka in Central and Eastern Europe — but it was the only vodka brand in Brown-Forman’s portfolio and sales were flat over the past few years.

Strategically speaking, Finlandia was more of a distraction than anything. Brown-Forman’s primary focus is their thriving whiskey portfolio — home to Jack Daniels, Woodford Reserve, Old Forester, and many others — closely followed by their burgeoning tequila portfolio, which consists of El Jimador and Tequila Herradura.

At the end of the day, vodka was an afterthought, and given that Coca-Cola HBC has distributed Finlandia in its most popular markets for many years, they’ll be a better steward for Finlandia’s next phase of growth.

Coca-Cola HBC has made some interesting acquisitions lately. In addition to Finlandia, they shelled out €45m for mixers brand Three Cents in August of last year.

Deals đź’°

Mergers & Acquisitions 

  • Grupo Apex, an acquisitive Spanish snack manufacturer and brand owner, purchased Patatas Fritas Santo Reino, a Spanish manufacturer of chips and nuts. FoodBev

  • As mentioned above, Brown-Forman sold Finlandia Vodka to Coca-Cola HBC for $220m. The Spirits Business

Fundraising

  • Dutch ethical chocolate brand Tony’s Chocolonely secured €20m from existing investors Verlinvest and JamJar Investments. Verlinvest now owns 55.9% of Tony’s Chocolonely, while JamJar modestly increased their stake to 4.9% from 4.1%. Confectionery News

  • Premium, sustainable water brand Hawaii Volcanic closed a $10m funding round. New to the cap table is L.A. Libations, the beverage incubator behind brands like ZOA Energy, PLEZi, and Four Sixes. BevNET

  • BrainTrust Founders Studio, a platform focused on black-owned beauty & wellness brands, announced a $25m venture fund called The BrainTrust Fund. Their first investment is Listener Brands, the owner of CurlMix and 4COnly. PR Newswire

What’s New 🤩

Apparel, Cosmetics, and Wellness

  • Sexual wellness brand LELO is expanding into beauty with the launch of their new lipstick line. LELO Beauty

  • Mecca, Australia’s largest prestige beauty retailer, officially made its European debut. Happi

Food, Beverage, and Alcohol

  • Spirits player Beam Suntory made its first move into the mezcal category via a strategic partnership with Mezcal Amarás, a mezcal brand founded in Mexico in 2010. It’s unclear if Beam Suntory acquired an equity stake, but they will distribute the brand starting on July 1st. The Spirits Business

  • Organic hard kombucha brand Boochcraft revealed the latest flavor from its Liquid Art Lab — Blueberry Ginger Ale. Sounds incredible. Twitter

  • Rocky’s Matcha, the premium matcha brand known for its pop-ups in LA and Miami, opened a permanent location in New York City at Awake NY. Instagram

  • Australian gin & whisky distillery Taylor & Smith launched a gorgeous new gin called Sloe Gin. Taylor & Smith

Data 🖥️

  • RTD tea volume is down 7%. Lipton is struggling and even AriZona is off by 4.1%. Beverage Insights