Scott is the founder of Influencer Capital and CELEB. He is a thought leader on the creator economy and celebrity business space. Influencer Capital is an organization that structures equity deals between startups and creators/celebrities.
Guest Author: Scott Van den Berg
The story of why Travis Scott’s liquor brand Cacti was discontinued shows what is wrong with celebrity-founded brands.
In partnership with beverage producer ABinBev, Travis Scott launched his own hard seltzer brand Cacti in 2021.
Cacti was an instant hit. Several retailers said that they had never seen anything like that before. They would sell weeks’ worth of inventory in hours.
However, Cacti was discontinued weeks after the tragedy at the Astroworld festival where 10 people were killed in a crowd surge.
“After careful evaluation, we have decided to stop all production and brand development of Cacti,” ABinBev said.
Celebrity-founded brands come with a massive risk: key-man-risk.
Key-man-risk arises when a business relies too heavily on one individual who generates enormous value for the operations.
If that celebrity is negatively in the news, it is impacting a business’s productivity and profitability.
Unlike a typical business, you can’t just swap out the celebrity and expect it will continue to grow in the same way.
Incidents and scandals like Astroworld can even lead to a complete boycott of a brand/person.
Celebrity-founded brands have to design their company in a way that they can live beyond the celebrity from day 1.
It should operate as a sustainable, independent brand that is supported by a celebrity, but not dependent on it.
