Bacardi Acquires Ilegal Mezcal

 

Bacardi Acquires Ilegal Mezcal

Bacardi Limited has jumped fully into the mezcal game and acquired Ilegal Mezcal, the company announced Monday.

The global spirits group bought an unspecified minority stake in the major mezcal brand in 2015, granting it national distribution.

“We believe that Ilegal has the credentials to own and lead the super-premium mezcal category at a global level,” said Barry Kabalkin, vice chairman of Bacardi Limited in a statement. “Ilegal perfectly complements our portfolio and bringing it into our business sets the brand up for even greater growth as mezcal captivates more and more consumers.”

The acquisition comes as no surprise as the group was rumored to be engaging in conversations to purchase the brand from founder John Rexer in May.

Ilegal has become a major player in the mezcal scene since debuting in 2006 after Rexer began smuggling bottles from Oaxaca, Mexico to Café No Sé, his clandestine bar and music hub in Antigua, Guatemala. Ilegal has since released an unaged joven, a 4-month reposado and recently introduced a 7-year extra añejo. Despite its new release which is typically geared towards sipping, Ilegal has earned its wide on-premise presence as a well mezcal, aligning with Bacardi’s drive towards on-premise recovery and echoing recent moves to premiumize its whiskey business, one of the leading on-premise spirit categories.

The brand’s identity has leaned into its contraband and bohemian-friendly history, producing a music series as well as launching political campaigns around immigration and LGBTQ+ rights. Rexer will continue to guide the vision of the brand, according to a release.

“Success for Ilegal goes beyond seeing more of our bottles on shelves; it’s about building our business the right way,” Rexer said. “Being a part of Bacardi will bring Ilegal to a larger audience while maintaining our commitment to sustainability and growing the business responsibly.”

The deal signals the continued rise of agave spirits, particularly the premium and above segment. The super-premium plus mezcal category is growing at a fast pace and is expected to grow at a CAGR of 16% over the next five years according to IWSR. Sales for the category are up 7.3% off-premise in the last 52 weeks ending August 12 compared to the same time last year, with Ilegal among the top five brands up 16.5% in sales growth, according to NIQ.

As tequila drives spirits sales, other major spirit groups have brought mezcal and sotol brands into their portfolios. But Ilegal is Bacardi’s first mezcal, joining tequilas Patrón, Cazadores and Corzo.

In 2017, Pernod Ricard purchased a majority stake in Del Maguey Mezcal for an undisclosed sum, and Constellation brands acquired a minority stake in Dos Hombres Mezcal in 2021, the label from Breaking Bad leads Aaron Paul and Bryan Cranston. Campari also Diageo launched its first mezcal in 2019 with Casamigos before purchasing Mezcal Unión in 2021. In 2019, Campari acquired a majority stake in Casa Lumbre’s Montelobos Mezcal and Ancho Reyes liqueur for $35.7 million. Pernod Ricard also made a recent investment in the sotol category, which has started to build an audience, and revealed an initial undisclosed investment last year in ultra-premium Nocheluna brand.

Terms of the deal were not disclosed.