Dowd on Drinks: Beverage Giant Plays Tequila Card

The Orendain family has been an economic and political force in Mexico's Tequila city and Jalisco state since 1926.

That is when Don Eduardo Orendain Gonzalez founded his tequila empire, Casa Orendain. His three surviving sons run the current operation with a third generation already in middle management. The elders also have, in effect, taken turns being the mayor of Tequila and heading the powerful industry group known as the National Council of Tequila, which their father also founded.

Now, international beverage giant Brown-Forman Corp. is taking over full ownership of Don Eduardo, Casa Orendain's flagship tequila brand, ending an eight-year joint venture with the family. Financial terms of the deal have not been disclosed.

Brown-Forman, headquartered in Louisville, Ky., has owned the right to sell Don Eduardo outside Mexico since 1999. Orendain will continue to make its other spirits in its rather small Tequila facility, labels familiar inside Mexico -- Orendain, Puerto Vallarta, Membrillo and San Andreas.

Meanwhile, Brown-Forman will switch manufacture of the high-end but limited-production Don Eduardo brand to a larger factory in nearby Guadalajara that makes Casa Herradura tequila, a brand Brown-Forman acquired in January.

What does all this mean to American consumers? No doubt a wider availability of the stellar Don Eduardo tequilas and perhaps, just perhaps, a slight reduction in pricing the super-premium brand if increased production results in increased sales volume.

One of the difficulties with the joint venture was that the Orendains' facility was not equipped to supply a larger demand. That problem should be solved by the move to the Casa Herradura plant.

"We believe Don Eduardo, which is still early in its development stage, has excellent potential to continue growing in the expanding super premium tequila category," said Paul Varga, Brown-Forman president and CEO.

"Just as our many successful American whiskey brands fit nicely into our portfolio, our premium and super premium tequilas will complement one another, as each tequila brand is uniquely positioned and differentiated. Together these wonderful brands give Brown-Forman a strong hand in one of the industry's most exciting growth segments."

Last fall I traveled to visit the Casa Orendain installation, journeying with its owners from their hillside fields where the spiky-leafed blue agave plants used to make tequila are grown, right through the distillation and packaging process. I quickly succumbed to the lures of their brilliantly made tequilas. Checking back on my tasting notes from various sessions, I found these observations among others:

--Don Eduardo Reposado: "This silky drink tended toward notes of butterscotch from being aged for several months in oak."

--Don Eduardo Silver: "This triple-distilled liquid is made from estate-grown blue agave, like all tequilas produced by the Orendain family. It has a slight and pleasing floral nose, an oiliness that is very smooth on the tongue and palate, with enough body to linger pleasantly even when sipped over an ice cube or two."

Given Brown-Forman's reputation for maintaining, and in some cases improving, the quality of brands it takes over, I have no particular fears for the future of Don Eduardo tequilas. When a company produces the likes of such spirits icons as Jack Daniel's, the world's largest selling whiskey, Finlandia vodka, Appleton Estate Jamaican rum, Southern Comfort and Chambord Liqueur as well as a substantial line of wines with such popular labels as Fetzer, Bolla and Michel Picard, quality is pretty much a given.

William M. Dowd covers the world of adult beverages at BillDowd.com