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Ten Ways to Get Drunk with Celebrities

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Have an 80-proof from the industry that's recession-proof!

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At best, it's been hailed as "recession-proof." At worst, it's been called "recession-resistant." Whatever you call it, the liquor industry has absolutely defied the rough financial climate that has plagued just about every other market on the globe. Jumping on a unique opportunity, the industry is shifting its branding strategy by casting its lot with some very famous people.

Pick almost any state in the union and you'll find a sudden upswing in liquor sales despite (some have speculated, because of) the troubling recession. Even Utah, considered among the more conservative states in the country, saw the state government's revenue from liquor sales increase $20 million between 2006 and this year.

"Obviously we're in a recession, so things have slowed down a little bit," says David Osgood, an economist at the Distilled Spirits Council of the United States, which in January announced that its industry wasn't "recession-proof" but was "recession-resistant." "Over the past ten years, we've seen a movement towards super-premium products and a huge move to vodka, which is now 28-29% of all industry volume."

With that rise in super-premium sales, many of the industry's largest distillers have begun building brands around celebrities they believe exemplify that super-premium lifestyle. Leading the way was Diageo (DEO), who in the past few years has built CÎROC Vodka as a brand around hip-hop icon Diddy while making best-selling musician John Legend the face of its Bailey's brand.

"In October 2007, Diageo made spirits history by entering into a strategic alliance with Sean 'Diddy' Combs. Sales have continued to grow quarterly since our strategic partnership announcement. According to IRI [Information Resources, Inc] data, our sales are up 112% over last year," Andrea Sengara, CÎROC Vodka's Senior Brand Manager told Minyanville. "According to the deal terms, Combs and Sean Combs Enterprises agreed to take the lead on all brand management activities for the CÎROC brand. We believe this partnership worked because Combs isn't merely a celebrity promoting a brand; he's an integral part of CÎROC and is intimately involved in our business every step of the way."

The same year as the high-profile Diddy venture, Gruppo Campari (CPR) bought a majority stake in Cabo Wabo, the premium tequila brand founded by former Van Halen lead singer Sammy Hagar. More recently, Drinks Americas (DKAM) partnered with another rocker, musician Kid Rock, on a beer brand. Diddy's success with CÎROC and the changing face of the industry show that building brands around American celebrities could turn spirits into the lucrative male equivalent of the fragrance industry. "Getting a celebrity endorsement is as old as marketing. But it is fairly new for the spirits industry," says Osgood. "With celebrity, there is a certain cache. You don't have to create that cache using other marketing techniques, because a celebrity brings it with them."

As with any celebrity brand, it's sometimes hard to differentiate opportunism from genuine passion. But with spirits, all you have to do is pour yourself a glass.

Here we take a look at some of the more high-profile spirits brands built around celebrities.

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No positions in stocks mentioned.

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