|Diddy is getting a 50% share of Diageo's Ciroc vodka, the latest celebrity booze to hit the market.|
Justin Timberlake has his own tequila, Kid Rock has a beer and Lil Jon has produced wine for nearly a year. That combination is enough to give consumers bed spins, but it's filling the till for increasingly brand-conscious celebrities and cash-strapped companies. Fans have helped the celebrity-spirits market grow 19% this year, even though Nielsen Co. reports that sales of those brands make up less than half a percent of the liquor market.
Not so long ago, musicians' love of alcohol came through more in their lyrics than in the liquor store. Digital Underground's "Humpty Hump" drank up all the Hennessy on the shelf. Billy Joel's date had her LVMH ( MC) Dom Perignon in her hand and her spoon up her nose. Busta Rhymes and Diddy passed Fortune Brands' ( FO) Courvoisier. Now, Diddy is developing and getting a 50% share of Diageo's ( DEO) Ciroc vodka, which resides in the shadow of the Bad Boy mogul's own brand. "You don't want people thinking about the name Ciroc, you want them thinking about Diddy," says Nick Nanton, co-author of "Celebrity Branding You" and co-founder of the Celebrity Branding Agency. "He ideally wants them to go buy a bottle of Diddy." Stars have pushed alcohol products since baseball slugger Mickey Mantle made Schaefer the one beer to have when you're having more than one, but the blame for recent oversaturation rests squarely on the ginger shoulders of Sammy Hagar. The former Van Halen frontman launched Cabo Wabo tequila in the late '90s and used the single "Mas Tequila" on his 1998 album "Red Voodoo" as an infomercial.
With Hagar doing the shilling and others doing the distilling, Cabo Wabo's distribution grew from 37,000 cases in 1999 to almost 150,000 in 2006. Two years ago, as rapper 50 Cent was making $100 million off the sale of his 10% stake in Vitamin Water to Coca Cola ( KO), Hagar sold an 80% share of Cabo Wabo to Campari ( CPR) for $80 million. Though film director Francis Ford Coppola and others have succeeded similarly with wine, Hagar made it OK to not only endorse but produce hard alcohol. Others followed, most notably Jay-Z after buying Armadale vodka in 2002 and becoming a co-brand director of Anheuser-Busch-InBev's ( ABI) Budweiser Select brand in 2006. The same year, designer Roberto Cavalli debuted a vodka that was double the price of the so-called super-premium Grey Goose to rave reviews. Italian-American actor Danny DeVito got into the Limoncello business a year later, and saw his sales double by 2008. Timberlake's 901 Tequila, meanwhile, was launched in four cities last month. Perhaps no one has had more success cashing in on celebrity alcohol than Drinks Americas ( DKAM). The company partnered with Donald Trump on vodka and with Willie Nelson on Old Whiskey River Bourbon. Their celebrity cache lessened brand-building promotion costs and increased the chance of someone trying a shot. If there wasn't demand for such products, Drinks Americas certainly created it. Trump's line sold 100,000 cases in its first year, while Willie has been good for 7,000 cases a year since launching in 2001.
The Drinks Americas line is expanding this year to include Kid Rock's American Badass Beer, which got its start during a two-day concert in Detroit last weekend, and a planned Dr. Dre tequila product. CEO J. Patrick Kenny boils down branding success to two steps: Entrusting the goods to people who know what they're doing (like the Heaven Hill distillery in Kentucky that produces Nelson's product) and finding a product that fits the personality. "We're not going to do Willie Nelson and fine red wine," Kenny says. Considering that rapper Lil Jon's California-produced Little Jonathan Vineyard wines haven't been roundly rejected since they went on sale in August, Willie might want to consider a merlot. Like lushes at last call, fans will drink just about anything you put in front of them.