Diageo has acquired fast-growing hard seltzer maker Far West Spirits LLC, which produces the Lone River Ranch Water brand.
Financial terms of the transaction were not disclosed, although Diageo is funding the deal through existing cash resources. The deal has already closed.
Katie Beal Brown, who founded Far West Spirits in 2019, will retain a minority interest in the company, as well as remain CEO of the brand, working with leadership at Diageo North America and Diageo Beer Company. Far West’s team will also be retained.
“We are so grateful for the diverse set of communities that have embraced our brand, extending far beyond our small place on the map,” Brown said in a press release. “We found in Diageo a world-class partner who believes in our vision to bring the spirit of Far West Texas to as many as we can.”
“We are excited to bring this vibrant young hard seltzer brand into our growing ready-to-drink portfolio,” Diageo North America president Debra Crew added in the release. “Lone River captures the magic of Americans’ love for agave flavoured beverages combined with their desire for light, convenient refreshment. This acquisition is very much in keeping with our strategy to acquire high growth brands in fast growing categories and we look forward to working with Katie and her team to drive Lone River’s continued momentum.”
Lone River Ranch Water is a take on the traditional West Texas cocktail made with tequila, lime juice and sparkling water.
Lone River’s portfolio of 80-calorie, 4% ABV offerings includes:
- Original Ranch Water hard seltzer, made with organic blue agave nectar and lime juice;
- Spicy Ranch Water, with Texas state pepper, jalapeño;
- And Rio Red Grapefruit Ranch Water, produced with a squeeze of Rio Red Grapefruit juice.
Those offerings are sold in 12 oz. can 6-packs, as well as a variety 12-pack, with a fourth flavor Prickly Pear Ranch Water.
Lone River will give Diageo another key player in the $4 billion hard seltzer market.
Lone River posted $4.287 million in off-premise sales in 2020, according to data from NielsenIQ provided by the Bump Williams Consulting Company.
UPDATE: Portfolio-wide Lone River sales in off-premise retailers year-to-date through February 20 are up 100%, to nearly $1.2 million, according to NielsenIQ AOC plus liquor and convenience data provided by 3 Tier Beverages. The Lone River brand family is also the 14th largest hard seltzer brand family through the first two months of 2021.
Off-premise dollar sales of Diageo’s Smirnoff Spiked Sparkling Seltzer reached $89.2 million in 2020, making it the fifth best selling hard seltzer behind Mark Anthony Brands’ White Claw, Boston Beer’s Truly Hard Seltzer, Anheuser-Busch InBev’s Bud Light Seltzer and Constellation Brands’ Corona Hard Seltzer, BWC reported. Smirnoff Spiked Sparkling Seltzer was an early entrant to the segment with a late 2016 launch.
Brown talked about Lone River Ranch Water’s early success during a panel discussion on emerging beverage brands at the Brewbound Live business conference in December 2020.
“Since we’ve launched, demand has constantly outpaced supply,” she said. “For us, the biggest challenge, as with many people in the industry, has honestly been just navigating how quickly we’ve had to scale our business, coupled with a lot of the supply chain disruptions that have happened due to COVID, so we had to get smart really quickly, and make a lot of big moves in our supply chain and production capacity.”