Diageo and Combs buy DeLeón tequila brand

Diageo and Sean Combs have formed a joint venture company to acquire the DeLeón tequila brand. The move marks Diageo’s latest step in reclaiming a leadership position in tequila in North America.

The joint venture, a 50/50 global partnership between Diageo and Combs Wine & Spirits, a privately owned business founded by Sean “Diddy” Combs in 2013, builds on the separate strategic alliance formed by Diageo and Combs Enterprises to develop and grow the Cîroc ultra-premium vodka brand. Since the alliance began in 2007, Cîroc has grown from just 50,000 cases a year into a nearly two million case brand.

The joint venture acquisition of DeLeón will allow the brand to benefit from Diageo’s strong distribution network, supply chain, and marketing capability and Sean Combs’ access to influencers and proven track record of marketing luxury lifestyle brands. 

DeLeón is a 100% blue weber agave boutique tequila brand with a loyal following in Hollywood and the US music industry. The brand has strong appeal with status-conscious consumers who choose spirit brands as part of their luxury lifestyle.  The acquisition of DeLeón will accelerate Diageo’s share of ultra-premium and above (US$40+) tequila, which is the second-fastest growing segment of the tequila category in the US.  DeLeón has five variants with suggested retail prices ranging from US$120 to over US$1,000. The brand has been distributed in 18 US states and Washington, D.C.

“The joint venture with Combs Wine & Spirits and its purchase of DeLeón is Diageo’s latest step towards returning to a leading position in tequila in North America,” said Larry Schwartz, president, Diageo North America.  “Expanding our relationship with Sean Combs into tequila was a natural choice given Sean’s ability to galvanise support for luxury brands, as we’ve seen with our work together on Cîroc.  Ultra-premium and above tequila is a very exciting segment – we already have a strong brand there with Don Julio and are pleased to complement that offering with DeLeón.”

“Celebration is a cornerstone of all my businesses, and this joint venture is a natural extension of that portfolio,” said Sean Combs, chairman, Combs Wine & Spirits. “DeLeón is an outstanding brand that appeals to those who love exceptional tequila in a distinctive bottle. Together with Diageo, we will take DeLeón to new heights."

Brent Hocking, founder of DeLeón tequila, added: “In creating DeLeón, I brought the skills of fine wine-making and natural barrel aging to the art of tequila. The result was a spirit unparalleled in purity and taste. I am entrusting DeLeón Tequila to the capable hands of Diageo and Sean Combs as both have demonstrated a commitment to luxury and quality which reflects my own commitment to the DeLeón brand.”  

8 January 2014 - Felicity Murray The Drinks Report, editor