After George Clooney sold his tequila brand, Casamigos, for a reported $1 billion in 2017, it was no surprise to see celebrities racing to the distillery gates in a bid to boost profits and profiles.
In the early days of celebrity endorsement, the world of alcoholic drinks was often a no-go area due to the thorny issues of morality.
As drinks brands have become more socially acceptable, there’s been a veritable overspill of top celebrities jumping on the bandwagon to launch their own tequila, gin, vodka, wine, beer, and energy drinks.
It’s no surprise: the profits to be made in the global alcohol market are massive. In 2020, Diageo bought the Aviation Gin brand, part-owned by Ryan Reynolds, in a deal that could be worth up to $610 million.
In this age of super-sized social media influence, A-listers like Dwayne ‘The Rock’ Johnson, Kylie Minogue, LeBron James, Nick Jonas, and Kendall Jenner (to name a few) clearly see the benefit of not just endorsing but creating and owning their own brand of alcoholic beverage.
Let’s take the explosion in celebrity tequila brands as an example. The two main issues that arise with superstar involvement are its environmental impact and cultural appropriation.
Tequila is made only in the Mexican state of Jalisco using the agave plant, which takes up to nine years to mature ready for harvesting.
The boom in tequila sales encouraged by celebrity brands has seen more land being cleared to grow agave, with smaller independent makers being priced out of the market.
Some farmers are being encouraged to harvest the agave a few years earlier, before it has developed its essential sugars.
Additives are then used to boost the sugar content, which degrades the quality of the end product.
This has seen mass market consumers becoming accustomed to poorer quality tequila with artificial flavors, which may push traditionally made pure tequila out of favor.
“Commentators have claimed that celebrities with little appreciation for the cultural importance of the drink are putting their names to brands.”
Phuong Huynh | Associate Director, WTW
Tequila production is a piece of Mexican history, an old industry using time-honored methods.
Commentators have claimed that celebrities with little appreciation for the cultural importance of the drink are putting their names to brands.
For example, Kendall Jenner was criticized for cultural appropriation in some quarters following publication of marketing images for the 818 Tequila brand.
Dwayne Johnson’s high-end Teramana tequila brand promotes how it uses sustainable farming and production practices that support the local community and have less impact on the environment.
Johnson’s passion for tequila appears to be no flash in the pan or get-rich-quick scheme. He invested heavily in the process, taste-testing the products, working closely with the producers, and not just using his profile to sell more bottles.
“Celebrities who build their drinks business on sound ESG principles will connect with the values of consumers and create stronger brand loyalty.”
Nguyen Thi Minh Trang | Deputy Head of Department – Property and Casualty, WTW
Businesses that manufacture products in a sustainable way, avoiding harm to the local environment and benefitting local economies and communities are surely more likely to stand the test of time.
Celebrities who build their drinks business on sound ESG (environmental, social and governance) principles will connect with the values of their consumers and create stronger brand loyalty.
Environmentally, a drinks brand must consider the impact it will have on the land where it is sourced from day one.
In the case of Teramana Tequila, traditional methods of farming, harvesting, and distilling are used, with the waste plant fibers and wastewater recycled and reused on the land.
A sound ESG strategy will also take the local culture and treatment of workers into consideration.
Respecting the historical context of the product, utilizing local expertise, and paying a fair wage to farmers and workers creates an enduring, robust brand – and makes good, sustainable business sense.
The growth in celebrity brands has contributed to the astronomical rise in popularity of tequila. That’s good news for the Mexican distilleries, right?
They are of course being paid to produce the liquor, but many celebrity drinks brands have been criticized for not investing sales profits back into the production plant and local region.
“Adding reputational risk insurance sends a clear message to shareholders and key stakeholders that a brand cares about its reputation and is ready to quickly respond to any potential crisis.”
Phuong Huynh | Associate Director, WTW
Once a drink brand has established sound ESG principles, keeping on top of the strategy is an ongoing challenge.
Adding reputational risk insurance to the risk management strategy sends a clear message to shareholders and key stakeholders that a brand cares about its reputation and is ready to quickly respond to any potential crisis.
In the fast-paced drinks market, its vital to stay ahead of the game with full understanding of the likely risks and the ability to respond in real-time to escalating chatter.
WTW has partnered with some of the global leaders in this field to develop a comprehensive reputational risk solution that includes:
To find out more about our Reputational Crisis Insurance and Risk Management Solution, please get in touch.
