(Photo: Casamigos)
George Clooney's Casamigos, once the darling of the booming celebrity-owned tequila market, has had a tough couple of years with consumers.
Sales of the tequila reportedly dropped by 21% in the latter half of 2024. Meanwhile, sales of Don Julio — also owned by British spirits firm Diageo — soared by 51%. The divergent trajectories of these blockbuster brands is beginning to pose an issue for their parent company, which is now admitting the tequilas have been "going up against each other" in a crowded market.
In a meeting with investors earlier this week, Diageo CEO Debra Crew said the company is "making progress on a turnaround" for Casamigos. Crew says that the brand is preparing for a "back to basics" marketing push sometime this year, adding that Casamigos is "still a younger brand" with "lower consumer awareness" compared to legacy names on the market.
But why is George Clooney's tequila failing to stick while its competitors continue to surge?
The name of the game appears to be premiumization. Across the industry, consumers are ditching lower-priced alcohol in favor of expensive alternatives, the kind of $70-plus bottles that brands like Don Julio, Casamigos and Clase Azul specialize in. The trend skyrocketed at the onset of COVID-19 as drinkers began stockpiling liquor at home. Though enormously profitable for companies like Diageo, premiumization comes with one major drawback. In the search for "quality of quantity," consumers tend to spend more money on a smaller number of bottles. In practice, this means that only a handful of brands can claim victory on the shelf — not the best thing for a company that sells two competing tequilas at around the same price point.
Casamigos has worked fast to keep up. Originally best known for its trio of core tequilas, the brand has begun rolling out new products at a steady pace. Over the past two years, Casamigos unveiled a charcoal-filtered cristalino alongside a spicy "Casamigas" tequila backed by Cindy Crawford, wife of co-founder Rande Gerber.
In 2017, Diageo purchased the brand from Gerber and Clooney in a deal estimated to be worth up to $1 billion. That 10-digit sales figure catapulted interest in the celebrity-backed tequila market as we know it today, paving the way for Kendall Jenner, Dwayne "The Rock" Johnson and Kevin Hart to launch competing products in the years after.
Time will tell how Diageo plans to relaunch the brand amid tight competition from dozens of celebrities on liquor store shelves.
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