French wine-and-spirits major Pernod Ricard has moved to bolster its presence in Tequila, taking a majority stake in the Código 1530 brand.
The deal, announced yesterday (17 October), strengthens the Absolut brand owner’s position in the fast-growing agave market, where the brand is available across 50 states. Financial terms were not disclosed.
Ann Mukherjee, the CEO of Pernod Ricard’s US arm, said the investment was a play to strengthen the company’s in the upper end of the Tequila category. Within the Código 1530 Tequila portfolio, its Blanco expression starts at an SRP of US$50. The brand sells its Añejo and Extra Añejo variants for $350.
“We are incredibly excited to welcome Código 1530 into our portfolio, enhancing our agave products offer especially in its upper segment where consumers and connoisseurs are eager to discover brands that combine strong roots with the most exclusive quality,” Mukherjee said. “Thanks to our newly-enhanced portfolio, we have never been more confident to lead the growth of the spirits’ industry within the US market.”
Pernod has faced questions about its presence in Tequila. Speaking at the group's capital markets day in Paris in June, Mukherjee told analysts the company did not “need Tequila to be able to continue to win” but stopped short of ruling out further M&A activity in the category.
As well as the newly-acquired stake in Código 1530, Pernod also owns the Olmeca, Altos and Avion Tequila brands.
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Código 1530 co-founder Ron Snyder added: “Our goal for Código has always been to produce and share the best possible Tequila. What started as simply enjoying our tasty tequila with friends in Mexico, quickly grew into an aspiration to share Código with discerning consumers around the world.”
The company’s portfolio also includes two mezcal expressions (Código Mezcal Artesanal and Código Mezcal Ancestral), that will join Pernod Ricard’s existing mezcal offer of Del Maguey and Ojo de Tigre. Del Maguey is the market share leader for mezcal in the US.
Earlier this month, Pernod also invested in the sotol market through some financial backing for the Nocheluna brand. Sotol is a distilled spirit from the Chihuahuan desert in northern Mexico and is not made from agave. It did not buy equity in the brand, which is owned by Mexican spirits group Casa Lumbre.
The Código 1530 deal is the group’s third in North America in the space of a week. Pernod has also upped its stake in New York headquartered wine-and-spirits group Sovereign Brands. The Martell brand owner said it expected the Sovereign deal to increase its profit from recurring operations by around 3% on a full-year basis.