Sazerac eyes distilling operations abroad
It is “extremely likely” that US-based spirits group Sazerac will purchase distilleries abroad “over the next 20-25 years”, the group’s president and CEO has said.
Speaking to The Spirits Business, Mark Brown confirmed his company’s increased global outlook since acquiring Southern Comfort from Brown-Forman for US$542m earlier this year – a deal that also included the purchase of Italian liqueur Tuaca.
While Sazerac’s business has historically been centred on the US, Southern Comfort greatly increases the group’s presence in markets such as the UK, Australia and South Africa.
“I think with the acquisition of Southern Comfort we actively became a global spirits company,” he said. “I think it is extremely likely that over the next 20-25 years we will end up buying distilleries in a variety of countries and in a variety of categories.
”So, for a specific example, China is very hard to ignore. Obviously there’s a very robust distillery industry inside China.
“Thankfully it’s not like a Star Trek film – we’re not boldly going where no-one has gone before – but it’s always been our ambition to be a global company, and the Southern Comfort acquisition was a very helpful way of accelerating that.”
However, Brown said Buffalo Trace owner Sazerac will remain exclusively as a producer of spirits and liqueurs, and does not plan to move into wine or beer.
As part of his international growth plans, Brown also confirmed Sazerac’s acquisition of its UK distributor Hi-Spirits. This deal, which was not publicly disclosed, was completed in the same 12 months that Sazerac announced seven other spirits-related acquisitions.
Despite such aggressive acquisition activity, Brown hinted that Sazerac’s portfolio will continue to grow in the near future.
“I think you have to step back and look at the dynamic in the industry, and I don’t think we see any particular reason for the general M&A activity in the industry to slow down,” he said.
“In a highly fragmented industry you obviously would bet that there’s going to be more consolidation. In fact, I would say consolidation in our industry could go on for another hundred years and we still wouldn’t be consolidated.”
He continued: “[I] think that in general the M&A environment in the industry will be substantial and that would suggest that we don’t particularly see a reason for anything to slow down as it relates to us.”
To read The Spirits Business’s full interview with Mark Brown, see the November issue of the magazine, out soon.