3 Kings

by Zack O'Malley Greenburg

  As all this unfolded, I went to visit Branson at a champagne speakeasy he once operated in Harlem. When I told him about my discovery, he produced a gold bottle that looked eerily like Armand de Brignac, aside from a different logo and name: Antique Gold. The brand, also produced by Cattier, sold for sixty to eighty dollars and was discontinued the same year Jay-Z’s champagne arrived. “Armand de Brignac—this product already existed,” Branson told me for Empire State of Mind. “They attached Jay-Z to it.”13

  The fact that Armand de Brignac was essentially an old Cattier brand revived at a fivefold markup was one of the key revelations from my first book. Jay-Z didn’t comment on the disclosure, but six months after the book’s release, branding guru Steve Stoute—a longtime friend and business partner of Jay-Z—confirmed that the rapper had “invested in his own line, Ace of Spades, made by Champagne Cattier.”14 Then, in 2014, Jay-Z and Sovereign issued a press release saying that the rapper had bought out the importer’s interest in Armand de Brignac. In reality, Jay-Z was either increasing the size of his equity stake or simply acknowledging something that had happened long ago. He still garnered a raft of gee-whiz headlines marveling that he’d decided to buy his favorite champagne, with scant mention of his existing interest in the brand.

  Armand de Brignac, meanwhile, expanded from its initial gilded offering to five variants, all bottled in similarly ostentatious fashion: a chromed-out blanc de blancs, a glimmering pink rosé, a ruby-red demi-sec, and a gunmetal-gray blanc de noirs; all were at least several hundred dollars per bottle. Well-heeled customers have been popping with impunity: according to Eric Schmidt, director of alcohol research at Beverage Marketing Corporation, the brand moved an estimated five thousand cases in 2009, surging to twenty-five thousand by 2015; in the high-margin champagne business, the latter figure likely translates to roughly $30 million in profit on $90 million in revenue.15

  The brand has wowed a selection of wine critics as well. Armand de Brignac’s flagship variant topped Cristal and Dom Pérignon in a 2010 blind tasting held by Fine Champagne magazine, and the blanc de noirs did the same in 2016.16 But skeptics remain, including Fass, who still prefers Cristal and can’t understand why consumers don’t feel the same way.17 “They went from a great champagne—granted, owned by a racist asshole—to a shitty champagne owned by Jay-Z that’s more expensive,” he says. “That doesn’t make any sense to me. It obviously wasn’t about the quality.”18

  Regardless of one’s opinion on the taste of Armand de Brignac, it’s clear that marketing served as a major ingredient in its success—and the way that Jay-Z promoted the brand represented something of a change in his own conspicuous consumption. Just as he featured the exotic Pagani Zonda instead of a better-known Bentley or Rolls-Royce in the “Show Me What You Got” video, Jay-Z displayed Armand de Brignac in lieu of Dom Pérignon or the newly forbidden Cristal. Sure, he had financial incentive to do this, but he also had a new philosophy to broadcast: I’m so rich that you’ve never even heard of the products I consume. Armand de Brignac and subsequent offerings were positioned to tempt fans with a taste of that lifestyle.

  By this point, Jay-Z had really ascended to a different level than that of his audience and even other A-list entertainers. As the 2008 presidential race heated up, he and Beyoncé campaigned for Barack Obama, who showed mutual admiration by referencing Jay-Z’s “Dirt off Your Shoulder” during the primaries when asked how he felt about recent jabs thrown by Hillary Clinton in the Democratic primaries. After Obama’s boundary-breaking election, Jay-Z and Beyoncé performed at the inauguration in early 2009 and soon became frequent visitors to the White House; in a matter of years, Jay-Z’s Roc-A-Fella cofounders had been replaced in his inner circle by heads of state and billionaires.19

  “I guess Obama took this [hope] thing already,” Jay-Z told Warren Buffett and Steve Forbes in a 2010 interview. “But… I hope to inspire.”20

  “Jay is teaching in a lot bigger classroom than I’ll ever teach in,” Buffett added. “They’re going to learn from somebody. For a young person growing up, he’s the guy to learn from.”

  Jay-Z wasn’t the only hip-hop mogul to embrace Obama in the lead-up to the historical presidential election of 2008. Diddy did it his way: by periodically broadcasting off-the-cuff YouTube missives that he dubbed the “Diddy Obama Blog.”

  “Due to the social revolution, things started to change,” Diddy once told me. “I started to be able to connect with people from around the world. I started to see different things… that inspired me. And I was just like, ‘Your journey is not done. You have a mission. You have to be able to share your experiences with people that are coming behind you.’”21

  In Diddy’s vlog—which typically opened with the mogul spinning in a circle in his front yard, holding a camera to his face—he’d offer his thoughts on current affairs, such as Sarah Palin being named the Republican vice presidential candidate in 2008 (“You are bugging the fuck out, John McCain,” Diddy explained). He also gave himself a new nickname: Cîroc Obama.22

  The moniker reflected an agreement he’d struck with Diageo’s Cîroc, then a four-year-old grape-based vodka line moving a mediocre forty thousand cases per year, hawked only by unremarkable ambassadors, like former NFL player Earl Little,23 who were paid flat fees to appear with the bottles. Diddy marked a clear improvement. “We were observant of the idea [that] at one point he was selling more clothes than Ralph Lauren,” says Stephen Rust, Diageo’s president of new business and reserve brands. “Which was really the impetus of beginning to think… Together with him, could we do something different with this brand?”24 Diddy had also offered a preview of his beverage-peddling abilities with frequent brand mentions, perhaps most notably while teaming with Busta Rhymes for “Pass the Courvoisier, Part II,” which helped boost sales of the cognac by 4.5 percent in the first quarter of 2002.25

  Because of Cîroc’s prior lukewarm performance, Diageo had little to lose, and Diddy and his team were able to negotiate an incredible deal. In my reporting over the years, I’ve learned that he splits profits from the brand with Diageo. Though the deal does not involve an actual equity stake, it functions like one; if Cîroc were ever sold, Diddy would share evenly in the proceeds. Says his lawyer Kenny Meiselas: “We made him a true participant in the success of the vodka.”26

  It is unlikely that Diageo would move a key brand out of its stable—“I would characterize us as buyers, not sellers,” says Rust27—but the ceiling for Cîroc is quite high. For instance, the late liquor baron Sidney Frank built Grey Goose into the world’s top premium vodka by pricing it ten dollars above Absolut, giving his beverage away at charity galas, and placing bottles in limos that transported glitterati to the Academy Awards. He sold his brand to Bacardí for $2.3 billion in 2004.28

  Diddy dove into Cîroc with his trademark tenacity. In addition to using YouTube, he was an early adopter of Twitter and, eventually, Instagram, all of which served as platforms for him to spout inspirational quotes alongside advertisements for Cîroc and other products. Millions followed him to catch a glimpse of his high-flying existence—itself an aspirational brand he’d been building since his days as a party promoter in the early 1990s. His lifestyle translated into compelling wealth porn in the visually driven social media world—and he made Cîroc an integral part of his image.

  One of his first moves after inking his deal with Diageo: defining his focus as “the art of celebration.” He told Rust that he was going to make Cîroc the official vodka of New Year’s Eve—and said it again in one of his first commercials for the brand, while seated between gorgeous women and consuming the beverage. Another ad depicted him arriving in Las Vegas on a private jet with a cadre of sharply dressed compatriots and then partying until daybreak, with Frank Sinatra’s “Luck Be a Lady” providing the soundtrack.

  “It’s not about who you know, it’s not about the consumers who recognize you,” says Rust. “It’s really about, how can you engage consumers in a way that they want to
be part of the journey that you’re on? That’s what I think Sean Combs has done extraordinarily… He brings consumers along [on] the journey with him.”29

  It was the opposite of the air of exclusivity that Jay-Z had cultivated for Armand de Brignac, and it paid off almost immediately. In 2008, Cîroc’s first full year with Diddy on board, the brand moved 250,000 cases, up from 100,000 cases the year before, and the number soared to 340,000 in 2009.30 Says Rust: “When we first did the deal, we imagined that in a few years’ time, if we had even doubled the business… we would have been wildly successful.”31

  Interestingly, some argue that Cîroc isn’t even technically vodka because it’s made from grapes instead of the customary potatoes or cereal grains. Beverage Marketing Corporation’s Schmidt points out that in the eighteen American “control states”—the ones in which the sale of booze is most heavily regulated by the government—many classify Cîroc’s flavors as part of the “cordials and liqueur” category. “Look at the actual definition of vodka,” adds Fass. “It does not say vodka can be made from these three things. It says vodka can be made from these two things.”32 Roberto Rogness, NPR commentator and general manager of Santa Monica’s Wine Expo, disagrees. “The definition is ‘odorless, colorless rectified alcohol diluted to sale proof,’” he says. “Lots of leeway there!”33 Rust’s take: “Does it matter?”34

  As a wine expert, Fass knows a thing or two about grapes, including the ugni blanc variety (also known as Trebbiano) at the heart of Cîroc. The brand’s bottles identify these as “fine French grapes,” but Fass tends to disagree. “It’s the cheapest fucking grape you can get… There’s not a shittier white grape,” he says, and then pulls back a bit. “I mean, it’s not bad like a fart.” Fass estimates that the price per ton of an extremely high-end grape that would go into a costly Pinot Noir from Burgundy could be as much as 1,000 to 2,000 percent more than a ton of ugni blanc. He figures the raw cost of a bottle of Cîroc is somewhere in the seven-to-ten-dollar range, meaning there’s a roughly threefold markup to wholesale. “The marketing is genius,” he says.35

  The term “fine French grapes” is certainly a subjective one, but wine experts generally agree that ugni blanc doesn’t exactly fit that description. Due to its high levels of acidity, it doesn’t become as sugary while it ripens, meaning that animals are less likely to eat it. Yields tend to be high, and cost is low. Ugni blanc grapes are still pricier than traditional vodka ingredients, though. “Off one acre of land, you’d definitely be able to make more vodka for far less money by growing a grain than you would by growing grapes,” says former Wine Spectator editor Eric Arnold. “However, if Cîroc tastes better than other vodkas, the higher price might very well be justified given the greater expense of cultivating the primary ingredient.”36

  One of Diddy’s crucial contributions to Cîroc was persuasively articulating an argument that the brand’s brass had been trying to make for years: that grapes are simply sexier than potatoes.37 “One of his favorite things [to say] is, ‘If you can have a vodka that comes from a history of wine-making, why would you do that versus the history of coming from potatoes?’” says Rust. “That’s Sean.”38 It’s almost a Steve Jobs move: just as the Apple founder gained a reputation for creating products that consumers didn’t even know they wanted, Diddy somehow managed to convince people that they had wanted vodka made from grapes, not potatoes, all along.

  The same could be said of flavored vodka. Cîroc’s Diddy-fueled success allowed it to expand beyond Snap Frost, starting with Coconut and Red Berry in 2010. That year, Cîroc’s sales doubled to eight hundred thousand cases.39 Diddy involved himself in every stage, from tasting early runs to picking the colors used on the front of the bottles and the words on the back. He managed to convey exactly what he wanted while tasting an early iteration of Peach, which debuted in 2011. “I want a cool peach that comes out of a basket on the back of a pickup truck,” he explained in one meeting. (In the booze business, “cool” means you can’t really taste the alcohol; “hot” means the opposite.) “You bite into it and it’s a little bit sharp, it’s a little bit tart, and then it gives you that full peach flavor, but it’s a little bit cool; it’s not hot.”40

  Diddy’s involvement extended all the way to the point of sale. He would personally ask bartenders at swank locales like Soho House why the Cîroc wasn’t on the top shelf—and made sure it ended up there.41 “It’s not just about running commercials, or putting up banners, or having signage at a festival,” Diddy told me in Austin. “It’s about actually being in the trenches.”42

  More flavors followed—Amaretto (2013), Pineapple (2014), Apple (2015), and Mango (2016)—and Cîroc’s sales went to 1,350,000 cases in 2011 and 2,000,000 in 2012, peaking at 2,100,000 in 2014.43 Diddy’s overall annual earnings surged in lockstep, from $30 million in 2010 to $60 million in 2014, per my estimates for Forbes. By that point, Cîroc was his largest income stream, and nonmusical ventures represented more than three-quarters of his haul. Diddy’s talent for monetizing his reputation as a party promoter had proved considerably more profitable than his musical output.

  “Sean was everything from [billboards] in Times Square in a tuxedo to jet planes to the house in the Hamptons to the White Party,” says Rust. “He was leading a lifestyle that Cîroc nicely fit into… Sean was able to drive this brand in an extraordinary way.”44

  In the wake of Jay-Z and Diddy’s success in the booze business, numerous hip-hop copycats emerged. Ludacris served up Conjure cognac in 2010, Pharrell Williams brought his Qream liqueur to market in 2011, Timbaland released sparkling spirit LeSutra in 2012, and Nicki Minaj launched Myx Moscato in 2013, to name a few. Rather than rival Jay-Z and Diddy’s products, these brands took aim at different categories—or even tried to complement their predecessors.

  “It’s not a hard liquor, but it could be mixed with Cîroc,” Timbaland told me of LeSutra right before its debut. “Men will wanna spike it up. Me, I’m not a heavy, heavy drinker; it’s perfect for me. I can walk around all day and get a buzz. It’ll boost me up for the meeting and not make me feel like I’m slurring.”45

  The results of some of these collaborations make one wonder if meetings should have been accompanied by a shot of sobriety. Though many of the agreements mimicked Jay-Z and Diddy’s moves, guaranteeing rappers equity or a profit share—perhaps most notably Minaj’s Myx, which moved 220,000 units in 2015 and 300,000 the following year46—most have had much shorter shelf lives. LeSutra still exists, though Timbaland is no longer featured in its online marketing materials; same goes for Ludacris and his Conjure cognac. Pharrell filed a $5 million lawsuit against Diageo when the company pulled the plug on Qream after just two years.

  The latter venture turned out to be similar in structure to a typical record deal, with Pharrell getting an advance against future royalties up front in exchange for being the face of the brand and making a set amount of public appearances on its behalf. He would receive additional cash only upon earning out—something that never happened, his team alleged, because the beverage giant didn’t properly promote Pharrell’s peach-flavored liqueur. According to the 2013 suit, Diageo “shrugged its proverbial shoulders and said there was inventory out in the field.”47 (Pharrell agreed to drop his complaint later that year.) There was indeed plenty of competition in the market—from Diageo’s own Cîroc Peach, among others. At the end of the day, though, Qream and its ilk failed because the beverages weren’t a seamless part of their ambassadors’ lifestyles in the way that Cîroc was for Diddy.48

  Meanwhile, Jay-Z busied himself rarifying his own lifestyle even further. He helped protégé-turned-superstar Kanye West establish an entire hypermaterialistic subgenre of hip-hop—luxury rap—whose apotheosis came in the form of Watch the Throne, an album they released jointly in 2011. The lyrics to “Otis” feature West dubbing himself the “Hermès of verses” and Jay-Z issuing a “new watch alert” for Hublot, a Swiss brand that sells five-figure timepieces. Again, he was plugging a Europea
n luxury goods provider that most of his listeners had probably never heard of. And again, he stood to benefit financially: Hublot chief Jean-Claude Biver told me when the song hit that he and Jay-Z were close to inking an official agreement. “It’s only a matter of time,” Biver said.49

  Sure enough, Hublot and Jay-Z partnered up in 2013 and released the Classic Fusion Shawn Carter, a limited-run watch available in black ceramic (250 pieces at $18,300 apiece) and gold (100 at $33,700). Unveiled in collaboration with Barneys New York, 25 percent of all sales went to Jay-Z’s Shawn Carter Foundation, a charity that offers college scholarships to needy kids. Did Jay-Z pick up an equity stake in Hublot along the way? “The brand doesn’t comment on their investors,” a spokesperson said.50

  Watch the Throne earned platinum certification and went on to capture four Grammy Awards. When Jay-Z arrived to pick up his hardware at the 2013 ceremony in Los Angeles, he came prepared with a plan to take the next step in the monetization of luxury rap. Decked out in a velvet tuxedo, he produced a bottle of D’Ussé cognac and proceeded to pour several ounces into his golden gramophone, taking sips as the cameras rolled.

  This was Jay-Z’s latest venture, a partnership with beverage giant Bacardí with aspirations to chase category leader Hennessy, just as Diddy had signed on with Diageo to create a spirit capable of competing with Grey Goose; indeed, Jay-Z’s D’Ussé deal resembled Diddy’s Cîroc agreement.51 The Grammy stunt sparked a wave of coverage that included a reasonably positive review from the Wall Street Journal: “While this may not be a cognac for the cognoscenti, it’s definitely an easy and enjoyable sip.”52