Rapper and entrepreneur Shawn "Jay Z" Carter has acquired a stake in a champagne brand that sells for $300 a pop, becoming the latest celebrity to enter the profitable and trendy business of alcoholic beverages.
Jay Z has bought a stake in the Armand de Brignac brand, an interest that was sold by New York-based wine and spirits company Sovereign Brands. Terms of the deal weren't disclosed.
The rapper's relationship with Armand de Brignac has existed since at least 2009, when a bottle of the champagne was featured in the "Show Me What You Got" music video. In that video, Jay Z is seen dismissing a bottle of Cristal in a casino, and instead approving of a golden bottle of Armand de Brignac. That endorsement ultimately led the then obscure family-owned champagne label, which was first unveiled in 2006, to nearly sell out its entire production run in 2009.
"We have had a wonderful relationship with Jay Z throughout the years since he first discovered Armand de Brignac," said Yvonne Lardner, a spokeswoman for Sovereign Brands. "He became interested in owning the brand and made us an offer we simply couldn't refuse."
Jay Z's interest in the high-end Armand de Brignac label had a chance to thrive after the rapper had a falling out with the owners of Cristal, another pricy champagne that has been featured in my rap songs. The makers of Cristal weren't too keen on the business that rappers and their fans brought to the Cristal brand, comments that led Jay Z to pull Cristal off the shelves of his line of nightclubs. The rapper also generated headlines for his endorsement of D’USSE Cognac.
Linking celebrities to alcoholic brands, either through endorsements or investments, has been a fairly popular practice in the booze business. Retired soccer star David Beckham earlier this year teamed up with Diageo to launch a new Scotch whisky, while Justin Timberlake, George Clooney and Sean "Diddy" Combs have all recently jumped on the tequila bandwagon. And as Fortune reported earlier this year, even 1990s teen musical act Hanson is getting into the business with the launch of Mmmhops beer.
Pricer alcoholic beverages have generally outsold less expensive offerings in recent years, especially within the spirits industry where high-end Scotches, bourbons and tequilas have sold well. But the champagne category overall hast struggled lately, with the industry's sales falling by 4.4% in 2013 according to Shanken News Daily, which quoted data from the Comité Interprofessionnel du Vin de Champagne (CIVC) trade group. Most of that decline was due to weakness in France and other European markets.