Campari Group adding to its Kentucky bourbon business

Campari Group CEO Bob Kunze-Concewitz poses for a photo in Milan, Italy, Jan. 30, 2018. Campari Group, owner of the iconic Wild Turkey brand, said Monday, Oct. 31, 2022 it will add to its Kentucky bourbon portfolio in a deal to obtain a majority stake in Wilderness Trail Distillery, with plans to complete the acquisition in the next decade. (AP Photo/Luca Bruno, file)

Campari Group, owner of the iconic Wild Turkey brand, said Monday it will add to its Kentucky bourbon portfolio by taking a majority stake in Wilderness Trail Distillery.

The Italian spirits company said it will acquire a 70% interest in Wilderness Trail, a bourbon and rye whiskey producer in Danville, Kentucky. Campari will acquire the remaining 30% of the emerging whiskey producer in 2031 as part of the agreement.

The 70% stake is valued at $420 million. The deal for complete ownership is valued at $600 million, according to Campari.

The acquisition will be funded through a combination of available cash and bank term loans. The transaction is expected to close before the end of this year, Campari said.

“By adding the fast-growing super premium Wilderness Trail brand we further expand and premiumise our bourbon offering, priming it to become Campari Group’s second major leg after the aperitif portfolio,” said Campari Group CEO Bob Kunze-Concewitz.

Campari Group made a big splash when entering the bourbon segment in 2009 with its acquisition of the Wild Turkey brand and distillery in Kentucky.

By purchasing Wilderness Trail Distillery, Campari will significantly expand its production capacity and inventory to meet growth plans for its premium bourbons, the company said.

Launched in 2012, Wilderness Trail Distillery is expected to generate annual sales this year of $57 million, up 39% from the prior year, Campari said.

Wilderness Trail's founders and current shareholders, Shane Baker and Pat Heist, said the deal will provide “the perfect foundation for the continued success of the Wilderness Trail brand and ensure it will be enjoyed around the world for years to come.”

In 2018, they launched Wilderness Trail Bourbon and Wilderness Trail Rye Whiskey. The portfolio expanded with the introduction of a high-end, silver label six-year and eight-year bourbon line.

Campari's further expansion into bourbon comes amid strong sales trends for American whiskey, especially for higher-priced premium and super premium brands.

Combined U.S. sales for bourbon, Tennessee whiskey and rye whiskey rose 6.7%, or $288 million, to $4.6 billion in 2021, according to the Distilled Spirits Council of the United States. Exports for the American whiskey segment reached $975 million in 2021, up 15% from the prior year as whiskey producers try to fully recover after previously getting caught up in a trans-Atlantic trade fight.