Del Maguey acquired by Pernod Ricard

The much anticipated news that Pernod Ricard had acquired a mezcal company finally hit, with perhaps the biggest surprise of all being who it acquired– Del Maguey. Pernod will take a majority stake in the US’ number one mezcal company. The exact terms of the deal were not disclosed. According to the press release and what we have heard from the company, the current management team and staff remain in place and all operations in Mexico remain intact as well.

Pernod is one of the top five spirit companies in the world, along with Diageo, Brown-Forman, Bacardi and Suntory. Given the moves by both Diageo and Bacardi in the mezcal world– Mezcal Union and Ilegal Mezcal respectively, it was rumored that Pernod was looking to pick up a brand for its portfolio.

Now what this means is the bigger question, especially on the heels of our recent piece on the mezcal conundrum. Obviously this is further validation that mezcal is not a trend beverage and large conglomerates are willing to put some money into the industry. This is good news if it means this kind of cash infusion goes into building better infrastructure, better pay for mezcaleros and their employees, and research into more sustainability projects. My glass is half full take.

But, I think this also points to the very gamed system in the international world of spirits and how given the layers required for export/import/distribution/sales staff, it is exceedingly difficult for small, craft brands (which is what the mezcal industry is) to compete. I fear the larger signal this deal sends is that in order for any mezcal brand to “make it” in the market, they have to be part of the larger spirit machine. The pressures that this could bring on production demands, drive for profits, etc could impact the industry negatively, turning it into just another alcohol to be sold, we mezcal obsessives greatest fear. My glass is half empty take.

As to the question of why, Ron Cooper, who is 74 this year, wants the company he built to be in the strongest position possible for the long haul, that the families and communities he has worked with for more than 20 years have long term security, and that product quality remains the focus. He says as much in an email sent this morning:

Dear Family,
Our team wishes to thank each and every one of you for helping us share and protect this ritual beverage for the last twenty-two years. And we look forward to continuing together, supporting this mission for many years to come.

I have received many inquiries and offers for investment into Del Maguey, but I have always said no thank you. We did not believe that anyone could ever completely understand, appreciate, or fully buy into our mission to preserve this culture, and to protect the ancient process of making Mezcal, and the indigenous artisan palenqueros that craft this elixir, or to embrace and appreciate their incredible liquid art …until now. Indeed, finally, after 22 years, we have found a true partner. A partner that understands exactly what Del Maguey is, a partner that wants Del Maguey to continue to be exactly who we have always been.

That partner is Pernod Ricard. After almost a year of getting to know one another, we have agreed to a partnership that will make Pernod Ricard a majority stakeholder in Del Maguey Single Village Mezcal. We will become part of the New Brand Ventures Division, a small group of entrepreneurial craft spirits companies.

It is important for each of you to know that the team at Del Maguey will remain intact. This includes all of our team in Mexico and the United States. And we will continue to operate Del Maguey as we always have. The liquid art of our palenqueros will not change. The only thing that changes is the increased opportunities for our families, and for our company.

I am personally pleased that we will continue to be the same. Perhaps most important to us, is that each of our palenqueros, each of the 12 families in 12 villages that work with us and that we support, some of whom have been with us from the beginning, none of whom have ever left us, will continue to be assured that they will be able to craft their liquid art in the exact same way that they have for generations. With the support of our new partners there is a sustainable future for their families and their communities.

We all want to acknowledge our friends at Sazerac for helping us to get to this point, by offering us the opportunity to be imported and distributed nationally, and we wish to thank them for several years of hard work helping us to build the Mezcal category. We continue to have great respect and admiration for the Sazerac family.

That said, we are honored to take our place as a key member of Pernod Ricard’s portfolio of premium spirits, and we are eager to work closely with them to continue Del Maguey’s incredible culture. We have seen firsthand their commitment to sustainability and social responsibility globally, and locally in Oaxaca, as they worked to increase the well-being of the community of Santa Ana del Rio and embraced and honored the local customs and traditions. We are confident that we are aligned, and that now, after 22 years, Del Maguey has found a likeminded partner committed to helping us to preserve this culture and ancient process, and support these amazing indigenous people, while helping us to continue to bring their liquid art to the world.

Stigibeu,
Ron Cooper