Unpacking the surge of celebrity-backed spirits

The influence of celebrities in various sectors has long been recognized, but one of the most intriguing developments in recent years has been their foray into the spirits industry. A recent report by Union, a hospitality engagement platform, provides some compelling insights into how celebrity-backed brands are performing, especially when it comes to pricing and market share.

According to Union's data compiled from over 50 venues across the United States, consumers are willing to pay a considerable premium for spirits brands backed by celebrities. The average price for a drink from a celebrity spirits brand stands at $16.25, a staggering 73% higher than the average cost of a spirits drink priced at $9.38. This stark difference in price reveals a couple of points worth considering. First, it shows the immense marketing power celebrities wield; their endorsement alone can warrant a nearly doubled price tag. Secondly, it illuminates the readiness of consumers to pay that extra cost to feel a personal connection with the celebrities they admire, albeit through a beverage.

While celebrity spirits represent a small fraction of the total spirits sold on-premise at Union venues—specifically, less than 3% of serves—they command an impressive 10% of sales share. It's a niche category but is growing steadily, with an increase of 16% in the 12-month period ending on 31 July 2023. Gary Ross, Union's chief growth officer, notes that this growth seems to be fueled by an increasing number of celebrities entering the spirits industry.

Among celebrity brands, Casamigos Tequila, founded by actor George Clooney and partners in 2013, remains a dominant force. The brand accounts for a whopping 91% of celebrity spirits sales at Union venues. While the second-best-selling brand, Cîroc, does well as the top-selling celebrity vodka, it still trails far behind Casamigos. Brands like Teremana, D'Usse, and The Finnish Long Drink have either remained stagnant or lost some of their market shares, failing to replicate Casamigos' growth trajectory.

Union's report also shed light on the types of spirits most popular among celebrity brands. Nearly half of the top 15 are tequila, followed by three vodkas and two gin or gin-based spirits. Whisky, Cognac, Mezcal, and an RTD also make the list. Interestingly, Kendall Jenner stands as the only female celebrity owner ranking among the top brands. This suggests a gap in female representation in a sector that continues to flourish.

The study by Union confirms that there's lucrative potential for operators who opt for selling celebrity brands. The significantly higher prices for celebrity Cognac and tequila indicate that certain categories are even more prone to the celebrity premium than others. As more stars venture into this industry, it would be interesting to observe how the market dynamics change and what strategies emerge to harness this growth for sustained profitability.

In summary, the burgeoning world of celebrity-backed spirits is more than a fleeting trend; it's a reflection of the power of celebrity in shaping consumer preferences and behavior. As this sector continues to grow, understanding the underlying economics and market trends will become increasingly crucial for industry stakeholders.