Bottles of Ciroc Vodka circa June 9, 2014. (Photo: Eric Charbonneau/Invision for Screen Gems/AP Images)
On Monday, Cîroc Vodka inked a joint venture with Lobos 1707, a tequila and mezcal brand backed by myriad celebrities including LeBron James, Issa Rae and Arnold Schwarzenegger. The move comes little over a year after Cîroc cut ties with disgraced music mogul Sean "Diddy" Combs, who had previously been a spokesperson for the vodka brand.
The deal is a little more complex than a straightforward merger or acquisition. Diageo — the same firm behind Guinness, Casamigos and Johnnie Walker — is exchanging its majority ownership of Cîroc in North America for a majority stake in Lobos 1707 globally. The financial terms of the deal have not been disclosed, though it has been announced that former Hulu and TikTok executive Nick Tran will act as president of the joint venture.
What this means from a branding standpoint is unclear. Lobos 1707 was founded in 2020 by Diego Osorio, who quickly assembled an A-list roster of partners to elevate his spirits brand to the next level. In addition to James, Rae and Schwarzenegger, investors include NBA players Anthony Davis, Fred VanVleet and Zach LaVine, sports agent Rich Paul and model Paris Hilton.
In December, rumors began circulating that Diageo was seeking buyers for Cîroc. The brand had witnessed a steep decline in sales following its peak in the early 2010s, culminating in a sharp 28% sales plunge in North America in 2023.
Some have attributed the drop-off to Cîroc's public association with Combs. The musician teamed up with the brand in 2007 to oversee marketing and promotion in exchange for a 50% share in profits. The partnership was a resounding success. Cîroc lept from 50,000 cases a year to a whopping 2 million within less than a decade, thanks in large part to ample product placement in Combs' music videos and red carpet appearances.
Diageo's relationship with the music mogul began to deteriorate in 2023. Combs sued the British spirits firm on the grounds of alleged mismanagement and racial discrimination, paving the way for what was initially shaping up to become a prolonged legal battle. However, Combs dropped his suit at the beginning of 2024, following the first in a wave of graphic misconduct allegations.
The Bad Boy Records founder is no longer associated with Diageo in any shape or form. According to an investors' report, Combs was bought out of his stake in DeLeón Tequila — a joint venture between the musician and the spirits firm introduced in 2009 — for $200 million.
Cîroc's future in North America now lies in the hands of Main Street Advisors, which co-led the initial investment push for Lobos 1707 in 2020.
“Cîroc and Lobos 1707 have incredible potential, and through this collaboration, we are unlocking new opportunities to accelerate their reach, resonance, and revenue growth in ways that traditional models cannot achieve," founder and CEO of Main Street Advisors Paul Wachter remarked in a news release.
Tran, the incoming president and CMO of the joint venture, added:
"The way modern consumers engage with spirits continues to evolve. That requires brands to evolve at the same pace. Today, social experiences are more intentional, digital spaces drive discovery, and transparency matters more than ever. To grow brands, we must reimagine storytelling, rethink engagement, and create experiences that are much bigger than just the liquid.”
