Spirit of Gallo is adding mezcal into its expanding super premium portfolio, while returning to top-end rum with an investment in Ron del Barrilito.
The wine and spirits conglomerate made strategic investments in the brands, but financial terms or the nature of the stakes were not disclosed. Gallo will now exclusively import both brands.
Established in 1880 and considered Puerto Rico’s oldest rum, Ron del Barrilito puts Gallo back in the luxury rum game; it previously imported Venezuelan brand Diplomatico until its acquisition by Brown-Forman in 2022. The high-end rum now joins liqueur RumChata and coconut water-based Rum Haven in Gallo’s rum portfolio.
“With an incredible legacy, Ron del Barrilito rum is poised to capitalize on the growth in the super-premium-plus rum category,” said Britt West, executive vice-president and general manager of Spirit of Gallo in a release.
Higher-end segments have been a bright spot for rum in recent years, and volumes are projected to grow at an 8% compound annual growth rate (CAGR) by 2027, according to IWSR data. Luxury brands as well as emerging craft labels are helping to change the spirit’s reputation as it catches up to the premiumization of other spirits like whiskey and tequila.
Ron del Barrilito has been gearing up for the challenge: the brand was purchased in 2017 by local investors and Joaquin Bacardi, a member of the family behind the rum dynasty. In 2021 the company embarked on a $12 million expansion to increase production by 400%. The new owners have kept the original ethos of the brand intact, bottling its four expressions without added sugar, coloring, or artificial ingredients. Its flagship 3 Stars product runs for a SRP of $39.99.
Building on its agave portfolio, Gallo has also brought in Derrumbes mezcal, a project featuring mezcal from various regions in Mexico. The partnership expands Gallo’s business with Derrumbes co-founder Sergio Mendoza, who is also behind Gallo’s Don Fulano Tequila. Derrumbes’ other founder, Esteban Morales, was the first to bring another agave spirit, raicilla, to the U.S. market through his brand La Venenosa.
Derrumbes offers three core products and four small batch expressions, ranging from just under $40 to above $100. With the majority of mezcal sold in the U.S. hailing from the state of Oaxaca, Derrumbes has differentiated itself by featuring distillations from multiple mezcal-producing states. While tequila and agave spirits have not been immune to the greater spirits slowdown, agave spirits are expected to add the most incremental value to the U.S. spirits market going forward.
Spirit of Gallo has been steadily expanding its premium and above portfolio, with spirits from Mexico playing a prominent role. In April, the company announced an investment in Mexico’s Condesa Gin and the company has partnered on a now fast-growing ready-to-drink cocktail with Mexican spirits company Casa Lumbre. Gallo now claims to have grown into the third-largest spirits supplier in the U.S by volume, boosted by the the top selling spirits product by volume, High Noon. The company also got into the beer business this year via a strategic investment in Montucky Cold Snacks.