Diageo to acquire Ryan Reynolds’ Aviation Gin
Aviation American Gin is an ‘American style gin crafted with a blend of botanicals, with subtle juniper notes, delivering a smooth balanced flavour profile’.
In 2018, actor Ryan Reynolds acquired an ownership interest in Aviation Gin, taking on an active day-to-day role in the business and overseeing its creative direction. Reynolds will retain an ongoing ownership interest in Aviation American Gin: and Diageo says his profile will help the brand grow internationally.
Through its acquisition of Aviation Gin LLC and Davos Brands LLC, Diageo also acquires the other brands in the Davos Brands’ portfolio: Astral Tequila, Sombra Mezcal and TYKU Sake.
Aviation gin's growth trajectory
The total consideration is up to $610m, which includes an initial payment of $335m and a further potential consideration of up to $275m based on the performance of Aviation American Gin over a ten- year period.
This reflects the brand’s current growth trajectory and expected upside potential, says Diageo.
Ivan Menezes, Chief Executive of Diageo, said the deal supports the company's moves in the super premium gin segment in the US. “The acquisition of Aviation American Gin and the Davos Brands portfolio is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation," he said.
“We are confident that Aviation American Gin will continue to shape and drive the growth of super premium gin in North America and we are looking forward to working with Ryan Reynolds and the Davos Brands team to accelerate future growth.”
Debra Crew, President Diageo North America, adds that Aviation American Gin will play an ‘important role’ in building on the long term premiumisation trends in the US and beyond.
“The entrepreneurialism of the Davos team and Ryan Reynolds combined with Diageo’s strengths will help drive the continued momentum of the brand in North America and we feel confident that with Ryan’s global reach that Aviation Gin can expand internationally.”
Ryan Reynolds said: “A little over two years ago, I became an owner of Aviation Gin because I love the taste of Aviation more than any other spirit.
"What I didn’t expect was the sheer creative joy learning a new industry would bring. Growing the brand with my company, Maximum Effort Marketing, has been among the most fulfilling projects I’ve ever been involved with.”
Aviation American Gin is the second largest and one of the fastest growing brands within the super-premium gin segment in the US, according to figures from IWSR. It grew volumes at over 100% in 2019, adding the highest number of cases and contributing 40% of super premium gin segment growth.
Diageo believes the brand is "well positioned to continue recruiting consumers into gin with its accessible flavour profile and American provenance."
Meanwhile, the super-premium segment of the gin category is gaining momentum in the US. Having more than doubled its share of the gin category between 2014 and 2019, it grew at a compound annual growth rate of 18.5% - making it the fastest growing spirits segment in the US, according to IWSR figures.
Diageo eyes up multiple trends supporting this growth: including consumer interest in quality ingredients like botanicals, and the variety of serves for gin and in craft spirits.
Founded in 2014, Davos Brands specialises in identifying key trends and early stage brands as well as creating and executing sales and marketing strategies for high growth brands in high growth categories.
The acquisition will be funded through existing cash and is expected to close before the end of 2020, subject to regulatory clearances.
In 2017 Diageo bought George Clooney’s ultra-premium tequila brand Casamigos. Its portfolio also includes gin brands Tanqueray and Gordon's.