Diageo/Diddy deal for Ciroc makes nice chaser

Sean Combs sees himself as a luxury brand builder.

But after launching successful clothing and fragrance lines, the one thing missing from his portfolio was premium liquor.

To fix that, Combs inked a deal late last year with Diageo to serve as the brand manager of Ciroc vodka in return for half of the product’s profits.

Depending on how well the vodka sells, Combs could earn as much as $100 million as part of the multiyear deal, Diageo says.

Combs sees the Ciroc pact as more than just an endorsement deal.

“He quickly has understood the value he brings to various brands is something he should be rewarded with,” says Derek Ferguson, chief financial officer for Bad Boy Worldwide Entertainment. “If he helps create something and catapults it to success, he should participate in the upside of that brand.”

Through his inhouse ad agency Blue Flame, Combs will essentially head up all decisions regarding Ciroc’s marketing, advertising, public relations and product placements; negotiate with clubs and retailers; and attract tastemakers to the brand through events and celebrity seeding.

“We want to make sure that we get people to try it and get the name out there,” says Dia Simms, g.m. of Blue Flame.

Hip-hop artists aren’t strangers to the beverage biz, with 50 Cent having minted considerable coin from his investment in Vitamin Water and Jay-Z having pushed Budweiser.

Combs has backed beverage brands in the past. He told Busta Rhymes to “pass the Courvoisier” in the song by the same name in 2002.

Ciroc fits into Combs’ portfolio of businesses because he “creates lifestyles,” he has said.

Indeed, Combs had considered creating his own vodka from scratch.

“But when he met with Diageo and tasted Ciroc, he said, ‘This is what I would make,’ ” Simms explains.

For Diageo, the company was looking to enhance the luxury profile for Ciroc, which was launched in the U.S. in 2003 and touted as being made from grapes.

“Sean Combs has a proven track record of developing high-end brands, and we expect his alliance with Ciroc to follow suit,” said Debra Kelly-Ennis, Diageo North America’s chief marketing officer in announcing the deal.

The company also owns the Johnnie Walker, Guinness, Smirnoff, Baileys, Cuervo, Tanqueray, Captain Morgan and Crown Royal brands.

There are certain things Combs isn’t going to do, however, says Jeff Tweedy, executive VP of brand development and licensing for Sean John. “It all comes down to whether it’s part of his lifestyle,” he says. “If it is, it’s easier for him to sell it. If Puffy wasn’t a drinker, it wouldn’t make sense for him to sell vodka.”

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