Diageo announced today it has acquired Far West Spirits LLC, owner of the Lone River Ranch Water brand. Lone River is a hard seltzer that takes inspiration from the popular classic Texan “Ranch Water” cocktail.
Lone River was founded in 2019 and brought to market in May 2020 by native Texan, Katie Beal Brown. Katie will retain a minority interest and continue to lead the business on a day to day basis, as Chief Executive Officer of the brand. She will work closely with Diageo North America leadership to build further on Lone River’s success.
Since it launched, off-premise sales of Lone River Ranch Water have eclipsed USD 5.5 million at grocery, drug, liquor and convenience stores.
Taking inspiration from the Ranch Water cocktail enjoyed by Katie’s family for generations, the brand is inspired by the spirit of West Texas and its sense of adventure. It brings an authenticity and accessibility that lends itself to days spent outdoors and to enjoying relaxed occasions with family and friends. The portfolio has three unique offerings:
- Original: The Original Ranch Water hard seltzer flavored with organic blue agave nectar and lime juice
- Spicy: Ranch Water with a kick of the Texas state pepper, jalapeño
- Rio Red Grapefruit: Ranch Water with a squeeze of Rio Red Grapefruit juice, the Texas state fruit
During Covid-19, the ready to drink (RTD) category has increasingly gained momentum in the United States, driven by consumer trends such as interest in lower sugar, lower calorie and gluten free offerings, as well as increased demand for convenient formats that are ideal for casual and at-home occasions. Between 2016 and 2019, the category grew 20%, driven by growth of 259% in the hard seltzer segment.
Diageo is already very successful with its RTD Smirnoff Spiked Sparkling Seltzer that reached USD 90 million in sales at grocery, drug, liquor and convenience stores over the last 52 weeks.
Since the launch of Lone River Ranch Water in May 2020, several other RTD ranch waters were introduced or will soon enter the market, including one from Heineken, which will launch its Dos Equis Ranch Water Hard Seltzer next month.
Market leader in the hard seltzer category in the US is White Claw by Mark Anthony Brands and Truly Hard Seltzer by Boston Beer Company that both together account for roughly 75% of the whole market. (inside.beer, 24.8.2020)
In the last year Molson Coors and AB InBev have also launch various hard seltzer brands in an effort to capture a big share of the fast growing market. Last September The Coca Cola Companyentered into an agreement with Molson Coors for the production and distribution of its Topo Chico Hard Seltzer brand. (inside.beer, 29.9.2020)
Debra Crew, President, Diageo North America, commented on the new deal: “We are excited to bring this vibrant young hard seltzer brand into our growing ready to drink portfolio. Lone River captures the magic of Americans’ love for agave flavored beverages combined with their desire for light, convenient refreshment. This acquisition is very much in keeping with our strategy to acquire high growth brands in fast growing categories and we look forward to working with Katie and her team to drive Lone River’s continued momentum.”
Katie Beal Brown, Founder and CEO of the Lone River Beverage Company, said: “We started Lone River with the dream of giving people a taste of Far West Texas. We are so grateful for the diverse set of communities that have embraced our brand, extending far beyond our small place on the map. We found in Diageo a world-class partner who believes in our vision to bring the spirit of Far West Texas to as many as we can.”
The acquisition will be funded through existing cash resources.