This Week in CPG - Campari Bets Big on Bourbon

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CPG WIRE
November 02, 2022

Howdy, folks. Welcome back to This Week in CPG. Let's get into it...

The Big Story

In terms of acquisitions, Campari Group had an extremely quiet 2021, and up until recently, 2022 didn't look much better.

Campari is known for its namesake aperitif brand and a handful of similar brands — Aperol, Crodino, Grand Marnier, Frangelico, etc. — which accounted for roughly 45% of its net sales for the first nine months of 2022. Campari also boasts a pretty robust spirits portfolio: Wild Turkey Bourbon (8% of net sales), SKYY Vodka, (5%), Espolon Tequila (6%).

Despite a quiet 18 months, Campari has recently made some large bets on its future, and its future appears to be more spirits than aperitif-oriented:

  • Campari agreed to shell out $420m for 70% of Wilderness Trail Distillery, a Kentucky-based producer of super-premium bourbons and rye whiskeys. Campari has the option to buy the remaining 30% in 2031. Link

  • In August the Italian firm acquired 15% of Howler Head, another Kentucky bourbon that's the official flavored bourbon of UFC. They have the option of acquiring the remaining stake in 2025 Link

These acquisitions make sense for the following reasons:

  • Campari has a solid foothold in the bourbon category but beyond Wild Turkey, their bourbon portfolio is nonexistent. With Wilderness Trail Distillery & Howler Head, they acquire two fast-growing brands at two very different ends of the spectrum, one super-premium and one mass-market.

  • Almost a third of Campari's sales occur in America, and American whiskey is a booming category. According to Campari, American whiskey accounted for 13% of the total domestic spirits market in 2021, up 7% vs. the prior year. They're poised to reap some of the benefits of that growth.

Moving forward it will be interesting to see if Campari adds to their tequila or vodka portfolios. Once again, Campari has a solid foothold in both, but a limited portfolio.

Deals

  • Iconic lingerie brand Victoria's Secret agreed to acquire digitally-native intimates brand Adore Me for $400m in cash. Adore Me was founded in 2012 and expects to generate $240m in revenue this year. Link

  •  Mars Petcare is acquiring Champion Petfoods from an investor group led by Bedford Capital and Healthcare of Ontario Pension Plan. The Canadian pet food maker owns two global pet food brands: ORIJEN and ACANA. Deal terms weren't disclosed but in June Bloomberg reported that Bedford was seeking a $2B+ valuation. Link

  • SURI (Sustainable Rituals), a London-based maker of sustainable electric toothbrushes, raised around $2.3m from Hambro Perks and JamJar Investments. Hambro Perks has been active lately, last week they led feminine wellness startup Daye's $11m Series A round. Link

  •  Lawrence Wine Estates — a portfolio of Napa Valley wineries like Brendel, Heitz Cellar, Stony Hill, Ink Grade, and others — acquired Chateau Lascombes, a storied Bordeaux winery dating back to 1681. This marks Lawrence's first European acquisition. Link

  • Consumer private equity giant L Catterton is reportedly raising around $275m for a fund focused on early-stage consumer brands in China. Thus far they've backed beverage decacorn Genki Forest and pet food unicorn Enova Pet Nutrition. Link

  • Young Mountain Tea — an Oregon-based sustainable tea brand that partners directly with Himalayan farmers — raised $1.1m in a combination of grant and equity funding. USAID provided the grant and Frontier Co-Op will provide the equity capital. Link 

  • As mentioned above, Campari Group acquired 70% of Wilderness Trail Distillery for $420m. Link 

What's New...

  • Some big margarita launches to start the week: canned margarita brand MARGS unveiled a stunning boxed margarita (link), while Stone Brewing announced their entry into the canned margarita space (link).

  • New premium hair care from Ulta executive Nick Stenson, Nick Stenson Beauty. Launching exclusively at Ulta. Link

  • Better-for-you candy brand Project 7 rebranded as Joyride. Pretty fantastic rebrand from Bex Brands. Their rebrand for Seaweed Bath Co. also crushed. Link 

  • TRUFF rolled out its latest product, Truffle Salt. Link

  • Beanless coffee startup Minus Coffee — they ferment date seeds, chicory, lentils, grape seeds, etc. instead of using traditional coffee beans — launched its cold brew. Word on the street is that it's quite good. Link

  • AB InBev and Novamex are collaborating on a Jarritos Hard Soda! Link

  • Speaking of coffee, Tip Top Proper Cocktails collaborated with Counter Culture Coffee on some cute Espresso Martinis. Link

  • Men's personal care brand Sierra Bravo announced its first cologne. Link

  • MOXY, a new private label personal care brand from Bath & Body Works. It looks great for a PL brand. Link

  • Playboy officially launched its lingerie line, The Icon Collection. NSFW. Link

  • Australian gin distillery Never Never Distilling Co. did something different and launched a beautiful malt whisky. Link

  • New Australian craft hard seltzer brand, Mode. Mode differentiates with an emphasis on local ingredients and unique flavors. Link

Distribution Quickfire

  • Home composting appliance maker Lomi is now available at Erewhon.

  • Better-for-you lemonade brand Swoon launched at Publix.

  • Pre & probiotic sparkling beverage brand Wildwonder went nationwide at Sprouts.

Thanks for reading along. See you again Saturday morning.

Robbie @ CPG Wire