George Clooney's Tequila Company
So, let me get this straight. He’s ridiculously good looking. He’s a renowned, award-winning actor. He’s married to an accomplished attorney who looks like a super model. He has beautiful homes all over the world, including Italy and England, where he parties with all his famous friends. And now, it turns out, he recently sold his tequila company—yes, he has a tequila company—for $700 million, plus a potential earnout of $300 million more depending on sales.
I hate George Clooney.
Actually, that’s the thing. It’s really hard to hate George Clooney. By all accounts he’s charming, generous, and involved in multiple humanitarian causes. He’s also one hell of a savvy businessman. Here we take a closer look at Clooney’s tequila business, Casamigos, and the deal that could net him a cool $1 billion.
House of Friends
Clooney co-founded Casamigos with friends Rande Gerber and Michael Meldman in 2013. You probably haven’t heard of either one, but, as you might imagine, if they’re within Clooney’s orbit they have fabulous lives.
Gerber, a successful bar and entertainment industry entrepreneur, is married to uber-model Cindy Crawford. Clooney and Gerber met some 30 years ago in one of Gerber’s New York bars when Clooney was filming one of his first movies. In 2009, Gerber and Clooney built extravagant side-by-side homes in Mexico. They dubbed their oceanside compound Casamigos (House of Friends). It’s here where the two friends came up with the idea of starting a tequila company.
George and Rande brought in Meldman, a real estate tycoon, as the venture’s third partner. Meldman, through his company Discovery Land Company, has developed some of the most luxurious residential communities in the world, including in Los Cabos, Mexico, where Clooney and Gerber built House of Friends.
On a Whim
While hanging out in Mexico together, Gerber and Clooney reportedly spent quite a bit of time cruising around on motorcycles and sampling different kinds of tequila. Eventually, somewhat on a whim, Clooney suggested to Gerber that they should just make their own tequila—one suited to their particular tastes. They found a distiller in Jalisco, Mexico, and after a lot of trial and error came up with the perfect concoction.
From Private To Profits
Initially, they only served their tequila to friends and family and had no intention of selling it to the public. But eventually the distiller said they were producing so much tequila for Clooney and Gerber that in order to continue the celebrity friends would have to get a commercial license. And with that, the duo turned their hobby into a private-label business.
After Casamigos was launched in 2013, the company sold 38,000 cases in 2014, then more than doubled that with 80,000 cases sold the following year. The company sold 120,000 cases last year and was on track to sell 170,000 cases by the end of 2017. While having Clooney’s name attached to the brand almost certainly helped boost sales, the tequila has received favorable reviews and won several gold medals at events such as the Los Angeles International Spirits Competition, the San Francisco World Spirits Competition, and The New York World Wine & Spirits Competition.
Casamigos is sold in 20 countries, including the US, Canada, UK, Australia, New Zealand, Hong Kong, and Spain.
Casamigos offers three varieties, differentiated by how long each one is aged. Bottles go for between $45 to $55. AÑEJO, the most premium brand, is aged in a barrel for 14 months and offers a “pure and complex aroma, with soft caramel and vanilla notes,” according to the website. In making the tequila, the company uses blue weber agave, a plant that is grown primarily in the Highlands of Jalisco, Mexico. The plant produces a high amount of sugars, most notably fructose, a common ingredient in alcoholic beverages. Agave, which has large, spiky leaves, can grow up to 7 feet tall and is pollinated by native bats. Casamigos roasts the core of the agave plants, called piñas, in a traditional brick oven for 72 hours. The agave, along with other ingredients like a special yeast blend, then undergo an 80-hour fermentation process.
Clooney’s Casamigos deal makes him one of the most successful celebrity investors around. Others include rock singer Sammy Hagar. He sold 80 percent of his Cabo Wabo Tequila company for $80 million in 2008 and then his remaining 20 percent stake for $11 million in 2010. U2 singer Bono hasn’t done too bad for himself either. His venture firm Elevation Partners invested $120 million in Facebook stock in 2010. After Facebook's IPO in 2012, the firm sold 11.5 percent of its shares, netting Bono an estimated $10 million. Rapper 50 Cent, who invested in the beverage company Glaceau, earned a cool $100 million when Coca-Cola purchased the company for $4.2 billion.
But rapper and producer Dr. Dre holds the current record for biggest celebrity payday. He made an astounding $620 million when Apple bought his Beats company for $3 billion in 2014.
According to multiple sources, including Forbes, Clooney and his two business partners each invested $600,000 apiece to start up Casamigos and reinvested profits. Media reports indicate that the initial $700 million payout split three ways would mean up to $233 million pretax for each partner. After taxes, they’ll each be left with about $140 million, with the potential to make another $100 million before taxes in the next decade if the brand hits its sales targets.
Diageo, the London-based company that purchased Casamigos, is one of the largest distillers and beer producers in the world, with offices in around 80 countries. Founded in 1997, It has more than 200 brands, including Smirnoff, Johnnie Walker, Guinness, and Tequila Don Julio (Diageo previously owned Burger King and Pillsbury as well). When Diageo purchased Casamigos, the company’s chief executive, Ivan Menezes, said he planned to expand the reach of the tequila company and sell it in additional markets beyond the U.S. The transaction is expected to close in early 2018, pending regulatory approval.
Both Clooney and Gerber have said they will remain intimately involved with Casamigos even after the transaction, and will continue to promote the brand and provide their leadership and vision. This includes, as is tradition, sampling each batch to make sure it meets their standards.
Diageo purchased Casamigos at an opportune time, as more people are indulging in tequila than ever before. Sales of tequila increased 7.4 percent last year, according to the research firm IWSR, outpacing nearly every other hard liquor category. Upscale brands have shown the most growth, according to the Distilled Spirits Council, with sales of “high-end” brands rising 292 percent from 2002 to 2016 and “super-premium” brands climbing 706 percent during that period.
Don't Eat the Worm
Tequila was first produced in the 16th century near the city of Tequila, which was established in 1666. One of North America’s first indigenous distilled spirits, tequila is most often made at a 38 percent alcohol content. Per U.S law, tequila must contain at least 40 percent alcohol (80 U.S. proof) to be sold in the United States. And the whole hallucinogenic worm thing is just a myth and marketing gimmick. Only certain mezcals, a distilled alcoholic beverage made from any type of agave plant native to Mexico, are sold with worms, which are actually the larvae form of a moth that lives on the agave plant.
The Real Thing
According to the National Chamber for the Tequila Industry, true, authentic tequila is a beverage protected by an Appellation of Origin, whose production begins with the fermentation and later distillation of the Tequilana weber blue variety agave sugars. Moreover, the tequila production process, as well as the cultivation of the agave, must take place within the territory specified in the Declaration of Protection of the Tequila Appellation of Origin. In order for a product to bear the name tequila, its production should be carried out in strict compliance with the Mexican Official Standard for Tequila.
An Insider Tip
When selecting a tequila, industry experts say that you should look for the NOM (Official Mexican Standard) and CRT (Tequila Regulatory Council) label on the bottle.
A Killer Career
One of George Clooney’s first movie roles was in “Return of the Killer Tomatoes!” The 1988 comedy-horror film is about…well, the title kind of says it all—as does the 0% Rotten Tomatoes rating. The comedy was a sequel to, of course, “Attack of the Killer Tomatoes.” Some of Clooney’s other early performances include guest spots on TV shows like “The Facts of Life,” “The Golden Girls,” and “Roseanne.” One of his first breakout roles was in 1996’s “From Dusk to Dawn,” a horror movie about criminal brothers battling vampires co-starring Quentin Tarantino. Clooney next starred in “Out of Sight” with Jennifer Lopez, which helped catapult him into stardom.
He has since received three Golden Globe Awards and two Academy Awards, and earns upwards of $20 million per movie role.
Legendary lothario Clooney first tied the knot in 1989 to Talia Balsam, an actress. The couple divorced four years later. Balsam starred in “Mad Men” as Mona Sterling Pike, opposite real-life husband John Slattery. Clooney was a dedicated and longtime bachelor following his first marriage—dating a string of gorgeous models and actresses—before marrying Amal Alamuddin in 2014.
A Charmed Life
Amal is a British-Lebanese lawyer specializing in international law and human rights. Her clients include Julian Assange, the founder of WikiLeaks.
After getting married, the couple bought a sprawling, 17th-century mansion on the River Thames in the British countryside. The nine-bedroom, eight-bathroom castle is situated on a 5,000-acre estate, which was used in the PBS series “Downton Abbey.”
A Lot To Smile About