Diageo has acquired Waco, Texas-based whiskey maker Balcones Distilling in a cash transaction, the company announced today.
Founded in 2008, Balcones is a leading producer of several super premium and above whiskies, including Texas American Single Malt, Lineage American Single Malt and Baby Blue Corn Whisky, each made from locally sourced ingredients.
“We are delighted to welcome Balcones Distilling into Diageo,” said Claudia Schubert, President, Diageo North America, in a press release.“The Balcones team are true innovators and pioneers in the emerging American Single Malt and Texas whisk(e)y movements, and their super premium plus whiskies are highly complementary to our whisk(e)y portfolio.
“This acquisition is in line with our strategy to acquire high growth brands in fast growing segments, such as super premium whisk(e)y, and we look forward to working with the Balcones team to support further growth for these world-class whiskies.”
The acquisition comes as super premium spirits have shown resilience despite inflationary pressures; according to a recent report from Rabobank, super premium spirits — largely driven by gains from tequila and American whiskey — has been the category’s fastest-growing segment, with revenue up 24.2% from 2020 to 2021. The American whiskey market is projected to grow by CAGR of 9.85% through 2027, according to Proficient Market Insights.
The transaction comes just over a month after Diageo purchased another premium brand: cold brew coffee liqueur Mr Black.
“Balcones started with an idea driven by an innovative spirit and passion to create something original and authentic in the heart of Texas,” said Greg Allen, Chairman at Balcones Distilling. “Now, we couldn’t be prouder to have created these award-winning American Single Malt and Texas whiskies, but also to have helped initiate an exciting new era of whisk(e)y in Texas. We are thrilled that Diageo shares our belief in its potential and we look forward to seeing Diageo bring Balcones’ incredible whiskies to more consumers.”