Patrón to increase capacity by ‘close to 50%’By Amy Hopkins
Bacardi is working to increase Patrón’s production capacity by “close to 50%” after completing its acquisition of the high-end Tequila brand earlier this year.
In his first interview since becoming CEO of Bacardi in October last year, Mahesh Madhavan said the expansion project is being conducted in three stages, with the first stage “going on stream now”.
According to Brand Champions figures, Patrón’s volume sales increased by 5.1% in 2017 to 2.6 million nine-litre cases.
While the brand’s production volume will increase, its artisanal processes will “remain the same” and the distillery team will “be given the same independence as they had before”.
Madhavan added: “We do not want to change the process, the way Patrón is made, and that’s the reason we have kept it completely separate from our existing structure.”
Bacardi, the world’s largest independent spirits group, acquired Patrón Spirits International and its namesake Tequila brand in April this year, in a deal that valued the company at US$5.1 billion.
Bermuda-based Bacardi has owned a minority stake in Patrón since 2008.
The Patrón purchase rounded off a busy merger and acquisition period for Bacardi. Since 2015, the firm has taken minority stakes in Irish whiskey maker Teeling, Ilegal Mezcal and Scotch whisky blender and bottler Compass Box, as well as majority stakes in super-premium rum brand Banks, Leblon cachaça and Angel’s Envy Bourbon.
According to Madhavan, Bacardi has an affinity with such independent brands and “understands their values”.
Of Bacardi’s acquisition strategy, the CEO said: “We have seen that in-house innovation is OK for line extensions, if you are doing a new flavour or a limited edition innovation.
“But when you put completely new brands with new concepts and new ideas [on the market], that isn’t done too well in house. So we always look for jewels in the making.”