Diageo enters Cîroc and Lobos 1707 exchange
Drinks giant Diageo has taken majority ownership of Lobos 1707, the Tequila backed by LeBron James, in exchange for the brand rights of Cîroc Vodka in North America.
The move is part of a joint venture Diageo has formed with Main Street Advisors (MSA), a leading investment and advisory firm.
The joint venture was designed to maximise Cîroc’s brand rights in North America, and to enhance Lobos 1707 worldwide.
Diageo has previously been embroiled in a lawsuit battle with former Cîroc marketing partner Sean ‘P Diddy’ Combs, which was settled in January 2024.
In Diageo’s financial results for the year ending 30 June 2024, the vodka brand’s sales fell by 26%. However, through the joint venture, its results will no longer be a part of Diageo’s financial statements for North America – instead they will be classed as income from the joint venture and associates going forward.
In all other markets, Cîroc will continue to factor in the results book for Diageo as it has done before.
Sally Grimes, chief executive officer, Diageo North America, said: “We’re thrilled to bring together two great brand builders, Diageo and Main Street Advisors, to shape culture in new and meaningful ways.
“The Main Street Advisors track record speaks for itself and together, we will establish a strong platform to unleash the full potential of the Cîroc brand for new generations and to drive the next phase of growth for Lobos 1707.”
MSA is based in Santa Monica, California, and has invested in Complex, Dave’s Hot Chicken, Fenway Sports Group, and Gin & Juice by Dre and Snoop, among other enterprises.
Paul Wachter, MSA’s CEO, added: “Cîroc and Lobos 1707 have incredible potential, and through this collaboration, we are unlocking new opportunities to accelerate their reach, resonance, and revenue growth in ways that traditional models cannot achieve.”
Nick Tran will serve as president and chief marketing officer of the venture. He joins with titles such as global head of marketing at TikTok on his resume, where he gained a reputation with developing strategies in relation to Gen Z audiences.
He added: “The way modern consumers engage with spirits continues to evolve. That requires brands to evolve at the same pace.
“Today, social experiences are more intentional, digital spaces drive discovery, and transparency matters more than ever. To grow brands, we must reimagine storytelling, rethink engagement, and create experiences that are much bigger than just the liquid.”
Both brands will keep their ‘distinct’ identities, consumer appeal and leaders. This includes Diego Osorio for Lobos 1707, the brand’s founder and chief creative officer.
The Lobos range includes three Tequilas – an extra añejo, reposado, and a joven – and a mezcal artesanal. The Tequilas are made using a centuries-old distillation process and are finished in Pedro Ximénez barrels from Spain, using the solera system.
In 2020, American basketball player LeBron James invested in the brand through MSA.
It will join Don Julio and Casamigos as Diageo’s headline Tequilas, the latter of which Diageo hopes to boost through a new campaign.
In Diageo’s results for the last six months of 2024, organic sales of Tequila soared by 21%.
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