Daily Newsletter

12 September 2023

Daily Newsletter

12 September 2023

Bacardi buys mezcal brand Ilegal

The deal follows speculation in February the private-equity firm L Catterton was in discussions to acquire Illegal.

Conor Reynolds

Bacardi has fully acquired the mezcal brand Illegal, six years after the spirits giant first invested in the US business.

Ilegal, based in Brooklyn in New York, was founded by John Rexer after he began importing mezcal from Oaxaca in Mexico to his bar in Antigua.

Bacardi bought an unspecified minority stake in Ilegal in 2017. As well as Bacardi, Ilegal’s previous backers included US-based private-equity firm VMG Partners. Announcing its acquisition of Ilegal today (11 September), Bacardi said it is now the “sole owner” of the IIlegal brand.

The deal follows speculation in February the private-equity firm L Catterton was in discussions to acquire Illegal.

“We believe that Ilegal has the credentials to own and lead the super premium mezcal category at a global level. 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,” Bacardi vice chairman Barry Kabalkin said.

The mezcal distiller produces three variants a joven, a reposado and an añejo.

Illegal founder Rexer said: “Success for Illegal goes beyond seeing more of our bottles on shelves; it’s about building our business the right way. We will always be committed to artisanal production, the Oaxacan community, and our core values. Being a part of Bacardi will bring Ilegal to a larger audience while maintaining our commitment to sustainability and growing the business responsibly.”

The rise in demand for mezcal has sparked M&A interest in the market. Since 2017, Pernod Ricard has acquired Del MagueyDiageo has bought Mezcal Unión owner Casa UM and Campari Group has picked up Montelobos.

In October last year, Pernod Ricard bought a majority stake in Código 1530, a distiller selling Tequila and mezcal.

Non-alcoholic beverages (NAB) market remain resilient despite inflationary pressure

Per GlobalData analysis, the NAB market has a strong outlook in terms of value and steady forecasting for volume up to 2026. The industry has been resilient to the pandemic and inflationary pressure as consumers continue to up their intake of NABs. Rising health and wellness trends mean that a growing number of consumers are swapping alcohol consumption for NABs while others are adding more drinks to their diet for improved hydration and extra nutritional value from fortified and functional NABs.

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