Wednesday, April 8, 2009

Gruppo Campari acquires Wild Turkey

I have to admit that I was surprised by the news today that Gruppo Campari, the makers of, well...Campari, have acquired Wild Turkey from Pernod Ricard for $575 million in cash. Not surprised that Wild Turkey was sold; there have been rumors about that. Pernod borrowed a lot to buy Absolut last year, and they're looking for cash to retire the debt; selling Wild Turkey was a quick way to do that, and analysts feel this was a good price.

This is Campari's biggest acquisition so far; they also recently bought SKYY vodka (2002), Cabo Wabo Tequila (the Sammy Hagar booze), and X-Rated vodka (both 2007), and picked up Glen Grant (a single malt that's big in the Italian market) as a side deal in the Allied Domecq dismemberment. Wild Turkey's definitely a jewel among those brands: it's growing, it has a strong foothold and excellent reputation in the U.S., Australia, and Japan, and, of course, it comes with Jimmy Russell.

This could be a smart move for Campari. Wild Turkey is a premium brand, in the honest sense of the word (maybe they'll enhance that premium aspect by dropping Wild Turkey 80 proof?). It has great name recognition; so does Campari, but people actually drink Wild Turkey.

What's this mean for Wild Turkey drinkers? Probably nothing at all, thankfully. It's all going to be back-office stuff: new wholesaler, new sales rep at most, and maybe not even that. Did anyone in the eastern U.S. even notice when Corona changed importers a few years ago? Nope. Wild Turkey has a strong enough pull from consumers that orders should keep up even if Campari bobbles things a bit (which they probably won't; they must have some kind of sales force, because there's a bottle of Campari on every damned back bar and I never see anyone actually drinking it).

I'll admit, this makes me a little sad. Wild Turkey was one of Pernod Ricard's earliest acquisitions, and they've been with the company for almost thirty years. Jimmy Russell will tell you that Wild Turkey is just a little family-owned company...only the family lives in Paris. I don't know if the Campari family still controls most of Gruppo Campari, but Milan (not Torino, as I originally misstated) just doesn't have the same pizzazz as Paris.

13 comments:

Anonymous said...

Bond market loves Pernod for this sale as well as the annnoucement equity rights issue. If you owned Pernod bonds you made some money today

Steve said...

I'm disappointed that you were unable to come up with $600 million to outbid Campari.

Fiddlesticks!

Lew Bryson said...

Well, you know, with two kids in school and a couple of Corgis...it's tough.

Anonymous said...

I actually drink Campari.... Totally true- it's everywhere and 99% of the bartenders who serve it have to blow cobwebs off the bottle and end up pouring generously since they have no idea how to serve it..not that i'm complaining...

Lew Bryson said...

I probably should make it clear that I didn't mean to sneer at Campari or those who enjoy it; I didn't at all. But as you say, those of you who do enjoy it are rare. I tended bar at a resort for almost three years, and poured Campari once.

Stephen Beaumont said...

I once ordered a Campari and soda at a bar where the bartender obviously hadn't a clue as to what I was talking about. Once instructed, she proceeded to fix the drink in a pint glass! And an Imperial pint glass, at that!!

That said, one of the truly great classic cocktails is the Negroni. If there exists a better aperitif, I have not as yet met it.

jp said...

I like Campari a lot, not that common in the States, but absolutely a mainstay in Europe especially Italy and France where it is consumed in great quantities.
Try a Negroni or a an Americano or just over some ice with a slice of orange. Anyway it was a good sale that raised decent cash for Pernod which probably get a ratings boost on the back of this transaction.

jp said...

Actually it is an interesting development in spirits biz, to see some guys diverging from super premium and other loading up. The bet is the weaker economy will benefit players like Diago with more mid and lower market portfilios (smirnoff and Capt. Morgan) and more tail brands vs. Players like Bacardi who have bulked up on premiums and super premiums (Grey Goose). My logic would lead me to believe that Diago wins this debate, but it ias still pretty unclear.

okbrewer said...

I actually enjoy Campari every once and a while, with soda and lime. I asked for Campari and soda at one bar and what I got was a rum and soda! Musta thought I couldn't pronounce Baccardi.

Bob R in OKC

TheAleReport said...

Just a side note: I cringe every time I hear Cabo Wabo referred to as "the Sammy Hagar tequila." That has a negative connotation to it, and Cabo Uno is really, REALLY good. Even if it does smell like hookers and cocaine.

Lew Bryson said...

You'd think that about Sammy, but it turns out the guy is actually pretty damned savvy and passionate about tequila, and had a lot to do with the actual spirit in the bottle. Amazing.

sam k said...

Wow, hookers and cocaine! I gotta get a bottle!

Anonymous said...

Campari is in Milan, and it is family owned. People definately drink it over here, although I am not sure they would know what to do with bourbon. Maybe we will get Wild Turkey over here now...if your lucky you can only find Jack and SoCo...(but tons of rums and tequilas...not really fair...)