Gallo invests in mezcal and rum

Spirit of Gallo has invested in Derrumbes, its first mezcal, and returned to the super-premium rum sector with Puerto Rican brand Ron del Barrilito.

The spirits arm of Californian winemaker Gallo has made strategic investments in the two brands but did not confirm if it had taken a minority or majority stake. Financial terms of the agreements have not been disclosed.

The investment in Derrumbes extends the company’s partnership with Sergio Mendoza and his family, who are behind Gallo’s Don Fulano Tequila. Through this agreement, Spirit of Gallo has taken the US import rights for the brand.

Each expression of Derrumbes highlights a style of the region where it was crafted. The brand offers three core offerings: San Luis Potosí, Durango and Oaxaca; and four small batch expressions: Michoacán, Tamaulipas, Zacatecas and Guerrero.

Meanwhile, Ron del Barrilito is described as Puerto Rico’s oldest rum brand, created in 1880. Under the deal, Gallo will become the brand’s exclusive US importer.

Gallo described rum as the fourth-largest category in spirits. The company said the super-premium and ultra-premium price segments have been the key growth drivers for the rum sector with a compound annual growth rate of 8% by 2027 (IWSR 2023 data).

“With an incredible legacy, Ron del Barrilito rum is poised to capitalise on the growth in the super-premium-plus rum category,” said Britt West, executive vice-president and general manager, Spirit of Gallo.

“To win in rum, we know it needs to be super-premium-plus. Ron del Barrilito has a strong heritage story, existing affinity amongst the trade, and robust quality statements that make it a valuable addition to our portfolio.

“We look forward to working with the team to help Ron del Barrilito reach its full potential here in the US.”

Return to super-premium rum

The investment also marks Gallo’s re-entry into the super-premium rum category; the company was previously the US distributor for Venezuelan brand Diplomático until it was purchased by Brown-Forman in January 2023.

Gallo owns rum-based cream liqueur brand RumChata and RumHaven, a coconut rum liqueur. In 2012, Gallo partnered with the West Indies Rum Distillery to produce its first rum – Shellback.

Ron del Barrilito was purchased in 2017 by Joaquin Bacardi and a local group of investors.

“Gallo is founded in the same family values that Ron del Barrilito prides itself on,” said Bacardi, who is president of Ron del Barrilito.

“We are excited to work with such a dominant force in the spirits industry that has represented iconic brands for generations. As we enter this next chapter of our history together, we look forward to honouring both brands’ rich heritages, while continuing to create premium experiences for our consumers.”

The brand’s recipe has remained unchanged since 1880 with the rums aged entirely in oloroso Sherry white oak barrels for three to 35 years. No sugar, caramel colouring or artificial ingredients are added.

Ron del Barrilito offers four expressions, including its flagship rum, 3 Stars, aged between six and 10 years. It can be served neat or mixed in cocktails such as an Old Fashioned.

The visitor centre in Puerto Rico welcomes more than 40,000 visitors every year.

In February 2021, Ron del Barrilito embarked on a US$12 million expansion to increase production by 400%.

West previously highlighted American whiskey and vodka as areas of “white space” in Gallo’s portfolio.

Gallo claims to be the third-largest spirits supplier in the US by volume.