Cuervo: Diageo split has created better opportunity

Jose Cuervo’s split from Diageo earlier this year has created “a real opportunity” for the brand to align itself with “more like-minded” distributors, its managing director has said.

Jose Cuervo has forged itself a “real opportunity” since its split from Diageo

The family-owned Tequila company parted ways with its global distributor Diageo in July this year, after the pair failed to come to an agreement over a takeover deal.

The decision, announced in December 2012, left Jose Cuervo with just six months to arrange new distribution partners across 34 countries.

“It was quite hard to find partners that fit in with Jose Cuervo’s philosophy, but the whole process became fascinating because it was like speed dating the industry in many senses,” Jose Cuervo’s managing director international told The Spirits Business. “But in most cases we were in the fortunate position of choosing a pretty good suite of candidates, certainly in the major markets.”

Gutierrez added that the split from Diageo has forged an opportunity for the group to “really strengthen our route to market”.

“My intention was to establish a new network built of more like-minded distribution partners,” he said. “We’ve ended up with a stable almost entirely made up of owner-managed businesses with an entrepreneurial spirit, with a lot of them family owned that frankly mirror our culture to a far more significant extent than Diageo. It means that we get each other a lot better.”

Cuervo has now secured new distribution partners in almost every market since the changeover, with the exception of “about 8,000 cases that remain homeless,” which Gutierrez assures is “nothing, a pin prick”. The group sold 5.6million cases in 2012, a 2% increase on 2011 volumes.

He added that for the year ahead, Cuervo will be concentrating on “executing the basics”, rather than expanding distribution, with a focus on ensuring the brand continues to grow at twice the rate of the Tequila category.