The story behind George Clooney’s tequila brand Casamigos, which sold to Diageo for $1 billion

George Clooney and Rande Gerber.
Casamigos

• Casamigos started as an idea between Clooney and friend
  Rande Gerber while they were in Mexico.
• The company sold to Diageo for $1 billion (£79 million)
  in June 2017.
• The sale just made Clooney the highest-paid actor of
  the last year, according to
  Forbes.
• The friends researched extensively to create a tequila
  they could drink all day without getting a hangover.
• In 2017, Gerber told BI he and Clooney were still
  tasting every batch of the tequila.

George Clooney’s success in the world of Hollywood is well known
— as are his efforts in political activism and humanitarian work.

A lesser known fact is that the actor and two friends founded
one of the fastest-growing tequila brands
in the world by accident in 2013. That company is Casamigos, which sold to Diageo for
$1 billion in June 2017 — a sale that just made Clooney the highest-paid
actor of 2018, despite not appearing in a film.

Diageo agreed to pay $700 million initially, with the potential
of another $300 million based on the tequila’s performance over
10 years, according to CNBC.

In an email to CNBC at
the time of the sale, Clooney said: “If you asked us
four years ago if we had a billion dollar company, I don’t think
we would have said yes. This reflects Diageo’s belief in our
company and our belief in Diageo. But we’re not going anywhere.
We’ll still be very much a part of Casamigos. Starting with a
shot tonight. Maybe two.”

Shortly before the Diageo sale, in March 2017, Casamigos
co-founder and ex-bar and nightclub owner Rande Gerber told
Business Insider that making money was never the reason
for launching the brand. 

“What was really important for George and I was that we have the
best tequila, but we make it affordable for everyone,” he said.
“George doesn’t need the money, I didn’t need it, Mike didn’t
need it — it wasn’t the reason behind launching a tequila. We
wanted everyone to be able to drink it and not be exclusive.”

Clooney came up with the tequila idea with Gerber — who also happens to be the husband
of supermodel Cindy Crawford — while the two were spending
time at their houses in Mexico.

They had met nearly 30 years ago while George was shooting one of
his first films in New York.

“He was coming into one of my bars called Morgan’s at the time…
so I met him at the bar over a tequila,” Gerber told Business
Insider. “He was spending three months in New York, and every
night we would hang out at the bar and we became great friends.”

The two would go on golf trips around the country with other
friends — “It was called ‘the Golf trip,’ but we played maybe
nine holes now and then” — which is where they met real estate
guru Mike Meldman.

“A mutual friend connected us, saying we should play at one of
Mike’s golf courses,” Gerber said. “He took care of us and we
developed a friendship through that, then we built our homes in
Mexico in Mike’s development.”

Casamigos was the name of Clooney and Gerber’s homes in
Mexico.
Casamigos

Clooney and Gerber’s houses sat beside each other on the piece of
property, which was called Casamigos.

“It felt like one compound,” Gerber said. “We’d have a bunch of
our friends there — breakfast at our place, lunch at his, dinner
at ours. It felt like one big house.”

And their meal times often involved sipping tequila.

“Casamigos really started by accident as far as a company,” he
said. “As you do in Mexico, we would drink a lot of tequila. We’d
go out to bars and restaurants and bartenders would recommend
them. Some were good, some not so good, and some expensive. There
came a point where George turned to me and said, ‘Why don’t we
create one that’s perfect for us?'”

“We wanted one that didn’t burn going down, that was super
smooth, and had the right flavour profile. One that we didn’t
have to mix — typically we drink it straight or on the rocks —
that we could drink all day long and not be hungover in the
morning.”

Motorbike was the vehicle
of choice for Clooney and Gerber in Mexico.
Casamigos

Tequila pilgrimage

The duo began their tequila pilgrimage. They did research, met
with distillers, trialled samples, and did blind taste tests with
their friends and family until they found a recipe with no burn
at all.

“It ended up being almost two years and 700 samples later — it
was perfect,” Gerber said. “There was a point where we all chose
one, and it was ours. Not only did we know we had something great
that we loved, but all of our friends loved it as well.”

Bottles were ordered, served, and drank at their homes in
Casamigos, which fittingly means “House of Friends.”

While the pair may claim they can drink it all day and not be
hungover the next, it’s probably not recommended for
inexperienced tequila drinkers — the average bottle contains 40%
alcohol.

Without even realising, Gerber said he and Clooney were bringing
in about 1,000 bottles, and were told by the distiller that they
needed to get licensed.

The three founders: Mike Meldman, George Clooney, and
Rande Gerber.
Casamigos

They met with a distributor in the US who wanted to get on board,
and launched the tequila as “Casamigos” along with the help from
their well-connected friend Meldman.

“He’s wonderful at marketing, and caters to the high-end market,”
Gerber said. “He’s smart, and has incredible relationships.”

Casamigos is aged and barrelled in
Mexico.
Casamigos

The tequila gold rush

The ultra-premium small batch tequila is aged and barreled,
Gerber said, while a master distiller “chooses the right moment
to take it from the barrel to the bottle.” He added: “We use old
brick ovens, and the Blue Weber Agaves are grown for seven to
nine years — it’s a long process.”

They use a simple stick-on label on an unfussy bottle, with a
plain cork to seal it. The brand sells reposado, anejo, and
blanco tequilas, which range from $20 to $115 online, depending on
the size.

It also launched a mezcal in the US,
Australia, UK, and Canada in February 2018, which comes in at $73
for 750ml.

Partly due to having George’s name attached, the Casamigos brand
“immediately took off” through word of mouth, according to
Gerber.

“We started winning awards, which legitimises you,” he said. The
brand has won gold
medals at the Los Angeles International Spirits
Competition, the San Francisco World Spirits Competition, The New
York World Wine & Spirits Competition, The Spirits of Mexico
Tasting Competition, and from The Beverage Testing Institute.
“From then on it gained momentum.”

The brand doubled its volume of sales from
38,000 nine-litre cases in 2014 to 80,000 in
2015, according to Ad
Age, which said it was part of a tequila “gold rush.”

Casamigos told Business Insider it more than doubled its volume
again in 2016, although Gerber, who works full-time running
Casamigos, declined to provide exact sales figures and would
not discuss the company’s earnings.

A spokesperson for Diageo also said on Thursday that it’s “too
early” to release financial results for the brand, which
is currently sold in more than 20 countries
including the US, Canada, UK, Australia, New Zealand, Hong
Kong, Spain, Italy, Peru, the Dominican Republic, and Jamaica.

Everything is done in-house in offices in LA, were Rande is
based, as well as New York and Arizona. He added that George and
Mike are still heavily involved, and at the time of the Diageo
sale CNBC
reported that Clooney, Gerber and Meldman were expected
to stay with the company after its acquisition.

“We all contribute an equal amount. Even though I run the
company, we all play our own role,” Gerber said in March 2017.
“George is very involved in the business. He’s in LA this week,
and he’ll be in the office when he’s here to go over ideas.”

Gerber and Clooney still taste every
batch.
Casamigos

He added that the two also make sure they taste every batch.

“We have our master distiller, and he’s so great that we know
they’re all consistent, but when a new batch comes out he’ll send
a bottle and George and I will taste it,” Gerber said. “We always
want to be the first or the second one to taste it. It’s kind of
a tradition. We open the bottle, toast, and take a sip.”

“It’s always perfect. If you have a great master distiller, they
have this palette and sense of smell and taste that has almost
been passed down from generation to generation,” he said. “We
want to be part of that process.”

Casamigos is “an extension
of who we are and our lifestyle,” Gerber said.
Casamigos

Brits are turning to tequila

Gerber added that Casamigos has been “incredible” growth in the
UK, where beforehand it “wasn’t that big of a thing.”

“George and [his wife] Amal have a beautiful home in the UK now,
and he wanted to make sure he could drink it there,” Gerber said.
“Even though Brits aren’t known as tequila drinkers, a lot of
whisky drinkers and vodka drinkers have switched to drinking
Casamigos.”

Gerber added that it’s “not your typical tequila” as it is low in
calories and made from 100% Blue Weber Agaves, which he says has
helped it catch on with both men and women.

“The authenticity of everything that we’ve done, from making it
ourselves to naming it, has been an extension of who we are and
our lifestyle,” Gerber said. “It’s been a fun thing for us to
do.”

While the pair sold their homes in Mexico shortly before we spoke
to Gerber, he said they were looking at building new ones in the
same place. Who knows what idea their next abodes will inspire.