US – Italian spirits group Campari is eying to expand its portfolio by agreeing to acquire an initial 70% interest in Kentucky-based Wilderness Trail Distillery.
The alcohol giant will be acquiring the initial stake for US$420 million and the corresponding enterprise value for 100% of the outstanding capital of Wilderness Trail for US$600 million in 2031.
Launched in 2012, Wilderness Trail Distillery produces Bourbon and rye whiskey, including six-year-old and eight-year-old Bourbons.
Campari expects the distillery to generate annual sales of US$57 million in this financial year, up 39% from the prior year.
The acquisition of the fast-growing super-premium brand, according to Bob Kunze-Concewitz, CEO of Campari Group, “significantly expands and premiums” Campari’s Bourbon offering, priming it to become Campari Group’s second major leg after the apéritif portfolio.”
Additionally, he added that the addition of Wilderness Trail Distillery also increases the production capacity and aging inventory to meet the future growth of the company’s premium Bourbons, including Whiskey Barons, which are “currently capped due to capacity constraints.
Bourbon is projected to become the second major focus of the brewer at a time when the global market of Bourbon is experiencing explosive growth ascribed to the product’s superior flavor profile and growing consumer demand for single malt and blended scotch flavors.
Furthermore, bourbon whiskey comes in a variety of flavors, including caramel, spice, citrus, peel, and vanilla, giving consumers a variety of alternatives.
Verified Market Research forecasts the global market for Bourbon valued at US$61.21 Billion in 2022 will grow at a CAGR of 5.7% from 2023 to 2030.
Citing figures from the Distilled Spirits Council of the US, Campari said the category also accounted for 13% of the country’s total spirits markets in 2021 by value, up 7% versus the previous year.
The super-premium price segment climbed by 17% and the company views American whiskey as among the ‘hottest’ spirits categories in the United States.
Campari Group’s American whiskey portfolio includes the Wild Turkey brand and its high-end Russell’s Reserve, alongside the company’s ultra-premium Whiskey Barons Collection, comprising the Old Ripy, Bond & Lillard, and William Butler Saffell brands.
This is the second-largest acquisition by Campari Group after it purchases Grand Marnier in 2016, according to Reuters. However, in August, the firm also took a 15% stake in banana-flavored Bourbon Howler Head from Catalyst Spirits at a financial term of US$15 million in cash.
The group also has the option to buy 100% of the brand only subject to future results, which can be exercised from 2025.