Heaven Hill’s Lunazul Aims To Hold Price Amid Competition In Accessibly-Priced 100%-Agave SegmentApril 4, 2012
Impact “Hot Prospect” Lunazul Tequila, owned by Heaven Hill Distilleries, was among the first 100%-agave brands seeking to compete at accessible price points long dominated by Jose Cuervo, Sauza and other mixto Tequilas. Similar brand propositions have cropped up with increasing frequency of late, but, despite the heightened competition, Heaven Hill expects Lunazul, which currently sells above 60,000 cases in the U.S., to continue its double-digit growth this year. The Lunazul portfolio features a Blanco and Reposado, both priced at $19.99 a 750-ml., and an Añejo retailing for $21.99, which was added last year.
“We were at the forefront of the 100%-agave trend and we definitely filled a space for consumers between Jose Cuervo and Patrón,” says Andy Shapira, director of sales analysis at Heaven Hill. “Now, there’s a lot of competition within 100%-agave Tequila at all price points. Several brands have repositioned themselves and there are a lot of 100%-agave brands launching at low prices, due to the current agave glut. But we plan to hold price.” Among the other 100%-agave competitors also aiming to steal share from Cuervo and Sauza are Proximo’s Azul, Campari America’s Espolón and White Rock’s El Charro, as well as Brown-Forman’s El Jimador, a former mixto that transitioned to 100%-agave in recent years.
In addition to an attractive price-point, Lunazul has leveraged its 100%-agave formula to attract consumers through its U.S. tagline “Totally Agave…Totally Smooth. Sacrifice Nothing.” The brand’s focus is primarily off-premise, but it has gained traction among bartenders and mixologists due to its reputation as an estate-grown Tequila with a rich heritage. (Lunazul is produced at the Tierra de Agaves small-batch distillery in Jalisco, Mexico, sourced from plants that have been controlled by Jose Cuervo’s Beckmann family since 1758.) “Mixto still dwarfs 100%-agave Tequila, but we’re extremely well-positioned with heritage and quality,” says Shapira. “We have significant distribution around the country, and I don’t see why we can’t blast through to six digits [of volume] in the future. But as a private company, we’re going to do it the right way—we’re not going to lower price.”Tagged : Brown-Forman, Heaven Hill, Jose Cuervo, Patrón, Tequila