Bacardi Continues to Ride the Mezcal Wave With Ilegal Acquisition
Bacardi is enhancing its brand presence within the rapidly growing super-premium mezcal category, announcing the purchase of Ilegal Mezcal.
Bacardi first partnered with Ilegal in 2015. Under the terms of this new deal, the spirits company will assume full ownership of the mezcal producer.
The consumer appetite for mezcal and tequila hit its stride during the pandemic when many shoppers opted to create their own premium cocktails at home amidst bar closures. Even as COVID-era closures have come to an end, agave-based spirits are still going strong when it comes to market share in the alcohol categories:
In announcing the acquisition, Barcardi pointed to research from IWSR that found the super-premium plus mezcal category is expected to grow at a CAGR of 16% over the next five years, with the agave category — which includes both mezcal and tequila — expected to be the sixth largest category globally, recently overtaking American Whiskey to become the second largest category (by value) in the U.S. at 86% of global market share.
In fact, according to the Distilled Spirits Council of the United States, tequila and mezcal sales grew by 17.2% or $886 million in 2022, making it one of the fastest-growing spirits categories by revenue.
Barry Kabalkin, vice chairman of Bacardi Limited, hinted at these broader ambitions, stating that the mezcal brand “has the credentials to own and lead the super-premium mezcal category at a global level” and that adding Ilegal to Barcardi’s portfolio would “set the brand up for even greater growth as mezcal captivates more and more consumers.”
Other big players spirits industry are catching onto this consumer trend and adjusting their buying strategies accordingly. Earlier this summer, Beam Suntory entered into a distribution partnership with Mezcal Amarás for the U.S. market, while Campari purchased a majority stake in Montelobos mezcal in 2019.
In 2022, Diageo acquired the flavored tequila company 21Seeds, aligning with its strategy to invest in the flourishing premiumization trend while offloading its Windsor whisky business at the same time. The company already owns Casamigos Tequila, which launched a matching mezcal brand in 2018.
