Diageo is teaming up with consulting and investment firm Main Street Advisors for a strategic joint venture that swaps out the spirits giant’s majority ownership of Cîroc Vodka in North America for a majority stake in basketball legend LeBron James-backed Lobos 1707 Tequila.
The deal is intended to accelerate Cîroc in the U.S. market while growing Lobos 1707 worldwide, according to a release. The announcement comes after Diageo was reportedly seeking a buyer for the vodka brand, following a lawsuit with former backer Sean “Diddy” Combs.
Main Street Advisors is led by investment advisor Paul Wachter, whose clients have included James, Arnold Schwarzenegger and U2 frontman Bono, among other celebrities. Nick Tran, the former global head of marketing for TikTok and an angel investor focused on consumer brands, has been named president and CMO of the joint venture.
“The way modern consumers engage with spirits continues to evolve. That requires brands to evolve at the same pace,” Tran added. “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.”
Lobos 1707, which includes three tequilas and a mezcal, was founded by actor Diego Osorio and backed by James in 2020.
“We’re thrilled to bring together two great brand builders, Diageo and Main Street Advisors, to shape culture in new and meaningful ways,” said Diageo North America CEO Sally Grimes in a press release. “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.”
Cîroc “will no longer be consolidated in Diageo’s North America financial results,” the company said, instead classifying its sales as income from the venture.
The company also noted that the joint venture is “consistent with Diageo’s Growth Ambition Strategy,” focused on its North American business, which makes up 40% of all net sales and nearly 50% of operating profit for the company.
The renewed focus on Cîroc comes just three months after Diageo settled a lawsuit in January with Combs; the disgraced entertainer accused the company in 2023 of racial discrimination and claimed that Diageo provided worse treatment and less support for Cîroc and another brand he backed, DeLeon Tequila, due to his race.
Diageo officially cut ties with Combs in June 2023 and has further sought to distance itself from the music mogul amid Combs’ ongoing criminal sex trafficking case.
Amid the lawsuit, Diageo was reportedly seeking a buyer for Cîroc as recently as December. At the time, Cîroc was the worst performing vodka in the company’s portfolio, with North American sales down 28% in fiscal year 2024. While Diageo’s other vodkas also fell, Smirnoff (-3%) and Ketel One (-5%) saw significantly smaller declines in the same period.
The company has sold off other parts of its portfolio in recent months: last summer, Diageo divested fruit-flavored liqueur Safari and rum line Pampero to international buyers.
As Diageo has undergone portfolio restructuring, the joint venture appears to keep two notable brands in its possession while entrusting Main Street Advisors’ “proven track record of investing in, incubating, and accelerating” businesses to help lift sales, according to the company. Diageo, meanwhile, cited its “unmatched route-to-market, supply chain, and marketing sophistication” as resources the joint venture will be able to tap into to support the project.
“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,” said Wachter in the release.