> ## Content Index
> Fetch the complete content index at: https://www.thetwoshoresbrief.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# When the Home Market Stops Growing, M&A Kicks In: What Gallo, Sazerac and Europe's Biggest Players Are Saying With Their Deals
- URL: https://www.thetwoshoresbrief.com/en/when-the-home-market-stops-growing-ma-kicks-in-what-gallo-sazerac-and-europes-biggest-players-are-saying-with-their-deals/
- Published: 2026-09-07T18:04:10.000Z
- Updated: 2026-09-07T18:04:10.000Z
- Description: The United States has stopped growing, and the big beverage houses are responding by buying categories, brands and distribution. What pattern they're following, how Europe already made this move in Mexico, and what it means for a brand still dependent on one or two markets.
- Author: Alvaro
- Tags: en, Partnerships & M&A

### IN 30 SECONDS

- The United States, the market that had carried the sector's growth, fell 5% in volume in 2025\. The big spirits houses have responded by buying: categories that are still growing, brands with heritage, and distribution.
- The pattern repeats: first a distribution agreement, then a stake, and eventually control. The partnership is the acquisition's due-diligence period.
- Europe's biggest players already made this journey in Mexico: Heineken, AB InBev, Campari, Diageo and Pernod Ricard entered or grew in the country by buying.
- One market, or two, isn't diversification. And evaluating a purchase, a partnership or a sale with time on your side gives an advantage that disappears once the decision is made out of necessity, with cash running tight.

In just over a year, Gallo has paid $775 million for a bourbon, Sazerac has taken stakes in two tequila brands and bought a vodka, Tito's has made the first acquisition in its history, and Pernod Ricard and Brown-Forman have sat down to discuss a merger. All of this has happened against a U.S. market that fell 5% in volume in 2025\. It isn't coincidence or appetite: it's what companies do when organic growth runs out in the market that had been carrying them.

## The U.S. Isn't Growing Anymore; It's Being Redivided

For two decades, the sector's growth could be explained with a single word: premiumization, and a single market: the United States. In 2025 that engine stalled. According to IWSR, alcoholic beverage consumption in the United States fell 5% in volume and 4% in value, with declines in 49 of the 50 states. Spirits suppliers posted $36.4 billion in revenue, down 2.2% from the prior year, and even tequila, the decade's star category, lost value. The only thing that grew was RTDs.

> According to IWSR, alcoholic beverage consumption in the United States fell **5% in volume** in 2025, with declines in 49 of the 50 states — the engine that carried two decades of sector growth stalled outright.

The underlying reading matters more than the number. When a market stops growing, companies that depend on it discover their previous growth wasn't entirely their own doing: it was the tide. And when the tide goes out, only three ways to grow remain: take share from someone else, expand outside the home market to diversify and grow demand elsewhere, or buy what's still growing. The first is slow, expensive, and decided at the point of sale. The second is a long game, where building demand that doesn't yet exist and reaching a new consumer from zero can consume enormous time and resources. The third is the most direct, and it's decided with a private contract between two parties.

## The M&A Playbook Kicks In — and Follows a Pattern

The deals of the past few months aren't isolated moves. They follow three repeating logics.

**Buy the categories still growing.** Sazerac has invested in 818 Tequila and in SipMargs, taking on their exclusive U.S. distribution; Tito's has bought Lalo Tequila; Diageo has taken a stake in Lobos 1707 in exchange for Cîroc's rights in North America; Molson Coors bought its way into Fever-Tree's U.S. operation, with an 8.5% equity stake and exclusive production, sale and distribution of its mixers in the country; and Spirit of Gallo has added Four Roses and Gran Malo to its portfolio. Agave and ready-to-drink cocktails are the only two categories with real growth in the United States, and the big houses would rather buy into them than build from zero.

**Buy heritage and scale.** Four Roses isn't a growth bet: it's a century-old bourbon with its own distillery. Gallo bought it from Kirin for $775 million to gain global presence in premium spirits. And moves like the one Pernod Ricard and Brown-Forman explored are a natural consequence: in a market that isn't growing, you buy your way to size.

**Prune to be able to buy.** Campari sold Cinzano to Caffo and Averna to Disaronno Group, confirming its "fewer, bigger bets" strategy. Constellation sold Svedka to Sazerac along with much of its wine portfolio. M&A isn't just buying: it's deciding which brands and which markets to exit in order to fund where you're entering.

One figure qualifies all of this. According to Capstone Partners, the number of deals in the beverage sector fell 18% in 2025\. Fewer deals are happening, but with more intent, and the consolidation Capstone projects for 2026 is in distribution, not just brands. Whoever is selling today is selling to fewer buyers — more selective ones, with more information.

## Europe Already Made This Journey in Mexico

For a European company looking at Mexico, the question isn't whether the playbook works. It already has, at the largest possible scale. Heineken bought FEMSA's brewing business in 2010 for $7.7 billion. AB InBev completed its purchase of Grupo Modelo in 2012, paying $20.1 billion for the 49% it didn't already own. Today the two European groups control the vast majority of Mexican beer, which is in turn the world's largest beer exporter.

> Heineken paid **$7.7 billion** for FEMSA's brewing business in 2010; AB InBev paid **$20.1 billion** for the rest of Grupo Modelo in 2012 — Europe's brewers already made, at massive scale, the journey now being repeated in spirits.

In spirits, the pattern is more recent and more instructive. Campari took control of Ancho Reyes and Montelobos in 2019\. Pernod Ricard bought a majority stake in Código 1530 in 2022\. And Diageo acquired Casa UM, the company behind Mezcal Unión, in 2021, after five years as its distributor. That sequence — distribution first, then a stake, then control at the end — is the sector's most repeated pattern, and its most sensible one: the commercial partnership is the acquisition's due-diligence period. You get to know the team, see the real numbers, test the sell-through, and only then set the price.

## Why Mexico and Latin America Are Entering the Equation Now

It's worth being precise here, because the easy argument is wrong. Mexico and Latin America aren't attractive today because they're growing: Mexico's wine and spirits market is in an adjustment phase, and Brazil fell 4% in 2025\. They're attractive for three distinct reasons.

The first is about origin. The two categories growing in the United States — agave spirits and agave-based ready-to-drink cocktails — are produced in Mexico. Anyone who wants to secure supply, brand and margin in those categories has to be in the country, and the fastest route is to buy or partner with someone who already is.

The second is about position. A market undergoing redistribution punishes brands with no reason to exist, but rewards whoever enters with structure while others are retreating. Assets — distributors, local brands and import licenses — are worth less when their owner is short on cash, and in Mexico, after two years of inventory and pricing adjustment, in our experience there are more owners short on cash than there were three years ago.

**The third is about real diversification.** A European company with 70% of its sales in its home market and the rest in the United States isn't diversified: it's exposed to two markets that have stopped growing at the same time. One market of operation, or even two, isn't diversification when growth stalls in both at once.

## What to Take Away From This

**M&A isn't an event; it's a playbook that gets activated.** When the home market stops growing, the big houses don't wait: they buy categories, buy scale, and sell what no longer fits. A mid-sized brand that doesn't have that playbook ready — with clear criteria for what it would buy, who it would partner with, and what it would sell — is going to get a call from someone who does. And it's going to get that call at the worst possible time.

**The partnership is the acquisition's due diligence.** Diageo distributed Mezcal Unión for five years before buying it. Sazerac is entering 818 with capital and distribution at the same time. A well-designed partnership isn't an alternative to acquisition: it's its first phase, and whoever structures it that way from the start negotiates later with information, not hope.

**Evaluating with time on your side gives you an advantage that necessity destroys.** A company that reviews its international footprint with two years of runway can choose its market, partner, structure and price. One that does it when cash flow is tight chooses from whatever's available, at whatever price is offered, with no time for real development. The difference between the two isn't the quality of the brand: it's when they started looking.

For a wine or spirits brand that today depends on one or two markets, the question is no longer whether M&A will affect it. It's which side of the table it wants to be sitting on when it does, and how much time it has left to prepare.

**Related resource:** [Capstone Partners: M&A in the Beverage Sector (March 2026)](https://www.thetwoshoresbrief.com/capstone-beverage-ma-2026/), on how M&A capital is moving in an environment where regulatory risk also weighs on every deal.

### Sources

- [IWSR, "Spirits worst performing category in 2025," April 2026, via The Spirits Business (U.S. −5% volume, −4% value; Brazil −4%; India +4%)](https://www.thespiritsbusiness.com/2026/04/iwsr-spirits-worst-performing-category-in-2025/?ref=thetwoshoresbrief.com)
- [IWSR, "US beverage alcohol consumption drops −5% in volume during 2025," press release](https://www.theiwsr.com/insight/press-release/us-beverage-alcohol-consumption-drops-5-in-volume-during-2025/?ref=thetwoshoresbrief.com)
- [DISCUS, Annual Economic Briefing 2026 (2025 supplier sales: $36.4B, −2.2%; tequila and mezcal −4.1% in value; RTD +16.4%), via The Spirits Business](https://www.thespiritsbusiness.com/2026/02/spirits-sales-fall-2-2-in-us-in-2025/?ref=thetwoshoresbrief.com)
- [Gallo completes $775M buyout of Four Roses from Kirin, April 2026, via The Spirits Business](https://www.thespiritsbusiness.com/2026/04/gallo-finalises-775m-buyout-of-four-roses-bourbon/?ref=thetwoshoresbrief.com)
- [Sazerac, investment and exclusive U.S. distribution of 818 Tequila, April 28, 2026 (PR Newswire)](https://www.prnewswire.com/news-releases/sazerac-announces-strategic-partnership-and-financial-investment-in-818-tequila-302755626.html?ref=thetwoshoresbrief.com)
- [Sazerac, equity stake in SipMargs and new distribution agreement, 2026 (PR Newswire)](https://www.prnewswire.com/news-releases/sazerac-acquires-equity-stake-and-enters-into-new-distribution-relationship-with-sipmargs-302770914.html?ref=thetwoshoresbrief.com)
- [Sazerac acquires Svedka Vodka from Constellation Brands, 2025, via Brewbound](https://www.brewbound.com/news/sazerac-to-acquire-svedka-vodka-from-constellation-brands/?ref=thetwoshoresbrief.com)
- [Park Street, "Alcohol Industry Mergers & Acquisitions in 2025" (Tito's–Lalo Tequila; Diageo–Lobos 1707; Campari sells Cinzano to Caffo)](https://www.parkstreet.com/alcohol-industry-mergers-acquisitions-in-2025/?ref=thetwoshoresbrief.com)
- [Shanken News Daily, Pernod Ricard–Brown-Forman merger talks, March 27, 2026](https://www.shankennewsdaily.com/2026/03/27/39481/pernod-ricard-merger-with-brown-forman-would-create-30-billion-200-million-case-global-spirits-player/?ref=thetwoshoresbrief.com)
- [Heineken buys FEMSA's brewing business for $7.7B, January 2010, via Business Standard](https://www.business-standard.com/article/markets/heineken-to-buy-femsa-beer-unit-in-7-7-bn-deal-110011200005%5F1.html?ref=thetwoshoresbrief.com)
- [AB InBev acquires the remaining 49% of Grupo Modelo for $20.1B (2012), via Ámbito](https://www.ambito.com/mexico/economia/la-empresa-mexicana-fundada-espanoles-que-revoluciono-el-mundo-las-bebidas-produce-17-marcas-nacionales-y-ahora-pertence-un-imperio-europeo-n6157500?ref=thetwoshoresbrief.com)
- [Campari Group acquires controlling interest in Ancho Reyes and Montelobos, October 9, 2019 (press release)](https://www.camparigroup.com/en/pressrelease/2019-10-09/campari-group-acquires-controlling-interest-ancho-reyes-and-montelobos?ref=thetwoshoresbrief.com)
- [Diageo acquires Casa UM (Mezcal Unión) after five years as distributor, August 2021, via The Spirits Business](https://www.thespiritsbusiness.com/2021/08/diageo-to-acquire-mezcal-union/?ref=thetwoshoresbrief.com)
- [Pernod Ricard acquires majority stake in Código 1530, October 2022 (Business Wire)](https://www.businesswire.com/news/home/20221017005867/en/Pernod-Ricard-to-acquire-a-majority-stake-in-Cdigo-1530-Ultra-Premium-and-Prestige-tequila-strengthening-its-agave-portfolio?ref=thetwoshoresbrief.com)
- [Molson Coors, strategic partnership with Fever-Tree in the U.S. (8.5% equity stake; exclusive production, sale and distribution), January 29, 2025 (Business Wire)](https://www.businesswire.com/news/home/20250129464093/en/Molson-Coors-Beverage-Company-Announces-Strategic-Partnership-With-Fever-Tree-in-U.S.?ref=thetwoshoresbrief.com)
- [Disaronno Group (then Illva Saronno) acquires Amaro Averna and Zedda Piras from Campari Group for €100M, December 2025 (press release)](https://disaronnogroup.com/illva-saronno-announces-the-acquisition-of-amaro-averna-and-zedda-piras-from-campari-group/?ref=thetwoshoresbrief.com)
- Capstone Partners, Beverage Sector M&A Update, March 2026 (deal volume −18.3% in 2025; consolidation expected among distributors)