Even if liquor isn’t always quicker, it can make your family very wealthy over time.
Take the Bacardis.
The world’s enduring thirst for their light rum has pumped billions of dollars into the family’s coffers since 1862, enriching hundreds of clan members now spread across the globe. About 6 million Bacardi rum and Cokes are thrown back every day, and the popularity of that classic cocktail known as the Cuba Libre helped Bacardi Ltd. sell 17 million cases of its eponymous spirit in 2017.
It’s no less a family affair if your preferred tipple is a Negroni, made with one part Campari, profits on which flow to Italy’s Garavoglia family. A Cosmo? If your triple sec is Cointreau (and it probably is), France’s Heriard Dubreuils take a cut. It’s a similar story for whiskey, from Kentucky’s Brown family of Jack Daniel’s fame to Japan’s Saji and Torii clan who own Jim Beam through Suntory. The Beckmann family own Jose Cuervo, the world’s best selling tequila. And then there are the Ricards, the French family behind the Pernod and Ricard aperitifs, as well as Jameson whiskey and Absolut vodka.
These drink dynasties, whose origins stretch back 1,300 years, reflect the extent to which families retain a firm grip on the industry, even though many of their companies have gone public over the years. Their outsize level of control and ownership relative to other businesses has proved to fabulously profitable. Seven of the world’s richest spirit families hold stakes worth about $70 billion combined, according to calculations by the Bloomberg Billionaires Index.
The nature of the spirits industry requires long-term planning and is therefore especially suited to family ownership, according to Alexandre Ricard, chief executive officer of Pernod Ricard SA and grandson of Paul Ricard, who invented the clan’s eponymous pastis in 1932.
“We carry billions of euros of strategic stock inventory, with an average age of seven years,” he said. “Its a long-term industry by nature.”
Just this month, the company unveiled its latest strategic plan — for 2030.
It’s a common refrain. “Having a long-term-focused, committed, engaged stockholder base, anchored by the Brown family, gives us an important strategic advantage, particularly in a business with aged products and multi-generational brands,” said Elizabeth Conway, a spokeswoman for Brown-Forman Corp., the maker of Jack Daniel’s.
Even as cocktails and straight spirits grow in popularity with a younger generation of drinkers, it may be getting more difficult to keep such businesses all in the family. Consolidation has been rife and the ability to reinvest and acquire attractive brands is a much easier ask if you’re the size of industry leader Diageo Plc, with $12 billion of annual revenue and brands like Johnnie Walker and Smirnoff .