View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Comment
October 3, 2022

Beverage M&A round-up, September 2022 – What Just Drinks thinks

Here are the M&A transactions in the international beverage market that caught the Just Drinks eye in September.

By James Beeson

Brown-Forman reaches for gin brand Gin Mare

Jack Daniel’s and Finlandia owner Brown-Forman moved to bolster its position with gin, snapping up the Spanish gin brand Gin Mare.

The US-based spirits major struck a deal with Gin Mare’s owners, the distillers Vantguard and MG Destilerías. Financial terms were not disclosed by either party.

Just Drinks thinks: The purchase of Gin Mare – at a time when white spirits, especially gin, are struggling to maintain spirits share in developed markets, raised some eyebrows among industry commentators. Indeed, Brown-Forman’s CEO Laurence Whiting himself recently remarked the category was “pretty weak” after the company’s fiscal 2022 results, choosing instead to purr about the company’s relative strength in American whiskey and Tequila.

Despite this, Gin Mare’s presence in the category remains an “enticing and promising position”, according to our very own Richard Woodard. Pointing to Gin Mare’s “ultra-premium” credentials and strong distribution, Woodard argues the Mediterranean gin brand is a strong complement to Brown-Forman’s existing portfolio, which is performing strongly in emerging markets such as Brazil, sub-Saharan Africa and Turkey. Gin Mare’s strong provenance and artisan credentials will also play well in the US market, which is slowly but surely becoming more premium thanks to the likes of William Grant’s Hendrick’s and Diageo’s Aviation.

Brown-Forman might be late entrants to gin but with their first major acquisition in the category, they have the right ingredients to set themselves up for success.

More on this topic: Emerging markets mean gin isn’t yesterday’s news

Diageo buys cold-brew coffee liqueur Mr Black

Diageo acquired cold-brew coffee liqueur producer Mr Black, an Australia-based business, for an undisclosed amount. The London-headquartered group bought a minority stake in the brand in 2015 via its accelerator programme, Distill Ventures.

Just Drinks thinks: Diageo was at the double when it came to liqueur-based M&A activity last month; offloading its Archers Peach Schnapps brand to De Kuyper Royal Distillers, whilst also completing a deal to acquire the remainder of Australia’s Mr Black from the brand’s founders Tom Baker and Philip Moore.

The latter deal reflects Diageo’s desire to be forward-looking in its M&A activity. Coffee liqueur is especially dynamic at present and, over the last five years, Mr Black has been the fastest growing brand globally in the segment. The brand’s presence in the US, where the spirits market is increasingly competitive, will also have been appealing to the UK-headquartered drinks major.

The move to rid itself of Archers is also in line with Diageo’s approach to portfolio management and feels prudent. Once cocktail-bar staples, drinks such as WooWoo and Sex on The Beach, in which Peach Schnapps are a key ingredient, feel increasingly like relics from a time gone by.

More on this topic: Why the prudent will prosper as the RTD boom continues

Heineken swallows up remaining stake in Beavertown Brewery

Heineken completed a deal to acquire full ownership of UK beer maker Beavertown Brewery. The deal came a little more than four years after the Dutch brewing giant took a minority stake in the Neck Oil brewer.

Following the transaction, Beavertown Brewery founder Logan Plant will step down as CEO, while the brewery will be run by a new managing director Jochen Van Esch – a 20-year Heineken veteran.

Just Drinks thinks: If Heineken’s move for Beavertown Brewery in July 2018 sent shockwaves around the UK craft beer community, the announcement last month it was to acquire the remaining stake in the London-based brewer was met with something akin to a shrug. Many craft beer ‘aficionados’ have moved on; quickly forgetting their love of Neck Oil and Gamma Ray in pursuit of brews from beer-makers with purer independence credentials.

Meanwhile, Beavertown has steadily been growing its sales – aided by distribution across many of Heineken’s 2,500-strong UK pub estate – and preparing for the inevitable buyout. It’s easy to scoff at Beavertown’s strong sales performance (revenues grew from GBP12.7m in 2018 to GBP35m in 2020) by reference to Heineken’s deep pockets, but the brand is a phenomenal success story, having outgrown production facility after production facility in the ten years since it was created in founder Logan Plant’s kitchen.

For Heineken, this is another sign the Dutch brewer remains more committed to artisan ales than many of its major rivals, some of which have been seeking to divest their craft brands in recent times. Carlsberg and Molson Coors have both had limited success in the UK craft beer market, while Lion last month sold its UK operations to Odyssey Inns. That said, having several thousand pubs to pump your products into probably helps bolster sales somewhat.

More on this topic: Hop-loving brewers need to remember beer drinkers matter

Fever-Tree diversifies with US non-sparkling mixer buy

Fever-Tree bought US small-batch, craft cocktail mixer brand Powell & Mahoney for US$5.9m.

The purchase, announced alongside a trading update, gives UK-based Fever-Tree the opportunity to “accelerate” into the non-sparkling mixer category, according to US CEO Charles Gibb.

Just Drinks thinks: Fever-Tree’s logistical struggles – as the sparkling mixer manufacturer attempts to make headway in the US – have been well documented. In that context, the acquisition of Powell & Mahoney makes a lot of sense, with the small-batch cocktail mixer brand owning its own production facility in Chicago.

For now, there’s no indication that this buy will have a knock-on effect on the UK group’s plans to build a factory on the US’ east coast but Powell & Mahoney’s production capacity and equipment may help to alleviate some of the worst stresses in Fever-Tree’s supply chain.

Other notable deals in the global beverage industry this month:

Purcari Wineries to take control of Angel’s Estate Winery

Eagle Park Brewing buys brands of US beer maker Milwaukee Brewing Co.

Diageo offloads Archers brand to De Kuyper Royal Distillers

Castel moves for wine e-commerce company Vinatis

JDE Peet’s swoops for French tea SME Les 2 Marmottes

Abegoaria Group expands Portuguese range with Vidigal Wines buy

Further data: Consumer industry cross-border M&A deals total $2.2bn globally in August 2022

Related Companies

Topics in this article: , , ,
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Drinks