How Clase Azul Built A Billion-Dollar Tequila Business Beyond The Top Shelf

Forbes

Arturo Lomeli is transforming his super premium tequila brand into Mexico’s first luxury house—including hotels and boutiques—while maintaining the brand’s independence.  Read the full story on Forbes: https://www.forbes.com/sites/chloesorvino/2024/12/20/how-clase-azul-tequila-founder-arturo-lomeli-built-a-billion-dollar-brand/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, how Clase Azul built a billion dollar tequila business beyond the top shelf.

00:08Inside his modern home in the hills of Guadalajara, Mexico, Arturo Lomeli is eating one of his

00:14favorite foods, taquitos, piled high with crema, salsa, and guacamole, as tequila is

00:20poured into crystal flutes around the table.

00:23The blue and white hand-painted ceramic bottles that Lomeli's brand, Clase Azul, has become

00:28famous for dot the room.

00:32Next up are mezcals, in decanters painted a matte black, red, or teal.

00:37And then there's the special edition Añejo tequilas, featuring artisans from around Mexico.

00:43To the right of the overflowing lunch table, Lomeli starts pulling out more bottles from

00:47his bar, where a large surrealist-style portrait of Clase Azul's founder and CEO with a bird

00:52on his shoulder watches over his personal collection.

00:56Lomeli, who is 52 years old, says, quote,

01:00My spiritual soul was chosen to protect it.

01:03I'm the guardian, a Mexican messenger.

01:06Meanwhile, sips of the $1,500 Dia de los Muertos Collection 2024 release, in a purple bottle

01:13featuring a metal skeleton playing an accordion, make the rounds for everyone but Lomeli.

01:19He gave up drinking a few years ago, he says, partly because he wants to live past 100.

01:25That doesn't stop him from running his super-premium tequila brand that's exported to 92 countries.

01:31Over the past three decades, Lomeli has perfected a playbook that relies on authenticity, from

01:37the distillation process to keeping the business Mexican-owned.

01:41He takes a long-term view and has invested vertically even where it might seem absurd.

01:46For example, one of the most recent additions to his sprawling bottling plant in the state

01:51of Jalisco, where a team of 50 artisans each glaze 100 signature ceramic decanters per

01:56day, five days a week, is a box-making facility pumping out custom packaging as fast as 18,000

02:03sheets per hour.

02:05Clase Azul even manufactures the metal caps for its decanters at a rate of 476 caps per hour.

02:13This strategy of going deep has created one of the hottest tequila brands ever sold.

02:19Wayne Chaplin, CEO of the $26 billion in annual sales Southern Glazer, which has distributed

02:25Clase Azul for two decades, says, quote,

02:28They've carved out a niche.

02:30Arturo's got this vision that is very different than all the other tequilas.

02:34Sometimes people are very anxious to sell more, quicker.

02:38He's not willing to compromise the luxury aspirations for his brand to get additional sales.

02:44Analysts in the food industry say that if Clase Azul were to ever sell, the deal would

02:49be in the billions, which says as much about the sky-high multiples that spirits trade

02:54at these days as it does about the strength of Lomeli's business.

02:58Clase Azul says it keeps its financials private.

03:01From 200,000 accounts globally, Clase Azul has estimated annual revenue of $150 million,

03:08surpassing the sales Casamigos had when Diageo purchased it in 2017 for $1 billion, or a

03:15deal value of 10 times revenue.

03:18Forbes estimates Clase Azul could be worth more than $1.5 billion.

03:23That's using a multiple of 10 times sales, which is on the lower end of today's market,

03:28particularly for a tequila brand.

03:30Beyond the Casamigos sale, Bacardi acquired Patron in 2018 at 8 times sales for a total

03:36of $5.1 billion.

03:39In 2022, actor Dwayne The Rock Johnson's Terramana Tequila sold a minority stake to

03:45Jagermeister in a deal industry insiders peg as high as $4 billion, or as much as 25 times

03:51estimated sales.

03:54Other spirits acquisitions are just as high.

03:57In 2020, actor Ryan Reynolds' Aviation Gin, for example, sold for $610 million, or an

04:03estimated 24 times revenue.

04:06Those high multiples match the profitability.

04:09Clase Azul's net income margins are estimated above 30%.

04:14Gross margins approach 70%.

04:17That tops publicly traded spirits conglomerates like $9 billion-in-sales Constellation Brands

04:22or $20 billion-in-sales Diageo.

04:26But don't expect an acquisition or public offering anytime soon.

04:30Lomelli says Clase Azul will remain independent, as well as 100% Mexican-owned.

04:36Lomelli is the brand's majority shareholder.

04:38A minority stake is owned by his brother-in-law from his first marriage, Juan Sanchez, who

04:43advised Lomelli as a banker based in San Francisco before starting full-time in 2003.

04:50For full coverage, check out Chloe Sorvino's piece on Forbes.com.

04:56This is Kieran Meadows from Forbes.

04:58Thanks for tuning in!

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