Drinks giant Diageo has expanded its fast-growing agave spirits range with the acquisition of Mexican mezcal brand Mezcal Unión for an undisclosed sum.
The business was launched in 2011 by a group of Mexican entrepreneurs with a strategy to develop the category and also preserve traditional production methods.
Diageo has worked in partnership with Mezcal Unión since 2016, supporting growth of the brand’s distribution network in Mexico, the US and other countries.
Over this period, growth at the business has accelerated and numerous Mezcal producers and agave farmers have been integrated as part of its sustainability and community support programme in Oaxaca.
Analysts at Barclays noted the business generated revenues of about $2.8m in the primary Mexican market and an additional $128k in the US.
“For context, Union Mezcal represents circa 1% of the overall mezcal market and circa 0.2% when compared against the Diageo’s overall agave portfolio,” Barclays said.
Mezcal Unión had also become one of the leading mezcal brands in bars and restaurants in Mexico, Diageo added.
Mezcal Unión will slot into Diageo’s ‘Reserve’ portfolio along with fast-growing agave spirits brands such as Don Julio and Casamigos.
The Johnnie Walker owner intends to maintain the sustainable credential of the brand, with the founders remaining with the business and the brand continuing its existing relationship with agave farmers and master distillers.
Mónica Michel, marketing and innovation director for Diageo in Mexico, said the group would take Mezcal Unión to “a new level”.
“We are delighted to continue working with its founders and welcome this brand to our Reserve portfolio, which includes exceptional brands across exciting and fast-growing categories like tequila and mezcal,” she added.
Mezcal Unión co-founder Alejandro Gutierrez Champion said: “We believe in the power of transformation through collaboration.
“This approach has supported both the growth of the brand and of local communities and agave farmers in Oaxaca. We are proud to have delighted consumers with an excellent artisanal-craft mezcal and are confident that as part of Diageo, one of the largest and most respected spirits companies in the world, Mezcal Unión will continue to support development of the category, open doors to new markets and strengthen our brand mission.”
The acquisition will be funded through existing cash and is subject to regulatory clearances.