Exclusive: Tito’s Takes Majority Stake In Lalo Tequila

Austin, Texas-based Fifth Generation, Inc., parent company of Tito’s Handmade Vodka, has made its first acquisition, agreeing to purchase a majority stake in the fast-growing Lalo Tequila brand for an undisclosed sum. Lalo, known for its single Blanco expression that averages $46 a bottle in NielsenIQ channels, recently earned Impact “Hot Prospect” honors after more than doubling in size to 155,000 cases in the U.S. last year. This year, it’s on track to potentially double its volume again.

“This opportunity is about leveraging a blueprint that Tito himself pioneered with Tito’s Handmade Vodka, one that proves you can build something enduring by focusing on quality, authenticity, and doing one thing right,” Tito’s president Jon Tepper told SND. “Lalo Tequila shares those same values, from its dedication to ingredients to the family story behind the brand.”

Founded by Eduardo “Lalo” González, David “R” Carballido, and Jim McDermott, Lalo, like Tito’s, is based in Austin. The brand was at just 10,000 cases as recently as 2021. Since then it has expanded rapidly, ranking as one of the 10 fastest-growing spirits labels in NielsenIQ channels this year, up 85% by volume and 86% by value in the 52 weeks through September 13.

According to the companies, the Tito’s acquisition will give Lalo “strategic sales support and access to an expanded distribution network to accelerate its scale from a local name to one with global reach.” “Lalo” González will continue to handle production.

McDermott, who serves as CEO of Lalo, told SND there’s plenty of room for the brand to continue building its distribution. “The brand was first sold in Texas and that remains our strongest market,” he said. “However, we have made significant inroads growing our footprint in markets like California, New York, and Florida. That said, there is plenty of opportunity for distribution growth across the country, not to mention our international expansion opportunities.” Lalo recently tapped Reyes Beverage Group as its distributor in the California market.

Lalo will now benefit from Tito’s enormous scale across the U.S. drinks industry. The leading vodka brand and second-largest spirits label overall by volume, Tito’s has U.S. depletions of 12 million cases, according to Impact Databank’s estimate, about half the size of spirits-based seltzer High Noon but well ahead of third-ranked Smirnoff, which is at approximately 8 million cases.

Moving forward, said Tepper, “Tito’s Handmade Vodka will continue to have a singular focus in the vodka category, and Lalo will remain committed to its Tequila—both staying true to what made them special in the first place.”

“At Tito’s, we’ve always said if you’re going to do something, do it well,” Tito’s founder Tito Beveridge added in a statement. “I’ve known the Lalo founders for a long time. They care about the juice. They keep it simple. They do things the right way, not the flashy way. That felt like home to us.”—Daniel Marsteller

Tagged : Fifth Generation Inc., Lalo, Tito's

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