Diageo PLC, the spirits giant behind Tanqueray gin, Guinness beer, Smirnoff vodka and Captain Morgan rum, is adding a new drink to its bar: Aviation Gin.
Diageo said it will pay up to $610 million – an initial payment of $335 million and a payment of up to $275 million based on the performance of the acquisition over a ten-year period – for Davos Brands, which includes Aviation Gin as well as Astral Tequila, Sombra Mezcal and TYKU Sake. Ryan Reynolds, who became a part-owner of Aviation American Gin in February 2018, will “retain an ongoing ownership interest” in Aviation, Diageo said.
“The acquisition of the Davos Brands portfolio, including Aviation American Gin, is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation,” said Ivan Menezes, CEO of Diageo, in a prepared statement. “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.”
The purchase helps the beverages giant gain a bigger foothold in the so-called “superpremium” drinks category, which appeals to younger consumers eager to learn about the distillation process and the many tweaks a small producer can make to lend a beverage new tastes. Part of the appeal of Aviation Gin, first crafted in Portland, Oregon, is its smaller reliance on juniper, a traditional gin ingredient. Diageo said Aviation American Gin is “one of the fastest growing brands within the super premium gin segment in the United States, ” with volume growth of more than 100% in 2019, and noted that the superpremium gin category has almost doubled its share of gin sales in the United States between 2015 and 2019.
Part of Aviation’s appeal is Reynolds’ hand in marketing it. Late last year, the actor enlisted the actress who took part in a controversial Peloton commercial, playing the same character – a wife who was given a Peloton bike as a holiday present, sparking outrage from consumers – but downing martinis. “This gin is really smooth,” she says, as the ad cuts to a picture of Aviation Gin.
“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,” said Reynolds, in a statement. Reynolds was introduced to Aviation by WME and Endeavor’s Talent Ventures group.