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As Casamigos Joins The Diageo Tequila Portfolio, Don Julio Keeps Climbing

September 7, 2017

While Diageo’s $700 million bet on Casamigos Tequila has been making headlines this summer, the drinks giant’s Don Julio label remains among the hottest brands within Tequila’s high-end tier. Last year, Don Julio was up 21% to 428,000 cases, according to Impact Databank, and in the year-to-date through June, the brand surged 31% in control states. For 2017, Don Julio is projected to rise 16% to 496,000 cases.

Diageo has expressed confidence in its ability to balance priorities between Casamigos and Don Julio. While Casamigos retails from about $45-$55 a 750-ml., Don Julio skews a bit higher, ranging from about $50 for its Blanco up to $140 for its 1942 expression and into the hundreds of dollars for its top-end Real Extra Añejo. With its upscale positioning, Don Julio has been a solid contributor to the Tequila’s high-end expansion (spearheaded by Patrón), which has seen the above-$40 segment surpass 3 million cases and take a 21% of the total category.

Among the variants currently driving gains is the Reserva de Don Julio Añejo, which was up 17% to 83,000 cases last year. Rodolfo Aldana, brand director for Don Julio, says the Añejo was up 14% through the first half of this year. Reserva de Don Julio Reposado is also on the rise, increasing 16% to 58,000 cases last year and advancing by 7% in the first half of 2017.

Aldana tells SND that experiential marketing remains key to not only building the Don Julio brand, but also stoking consumer interest in the Tequila category overall. “We’re continuing to build scale by offering in-depth tastings of our portfolio, and in everything we do we highlight the story of our late founder Don Julio González and how he helped to revolutionize the Tequila category,” Aldana says.

When Diageo acquired full control of Don Julio from Casa Cuervo in 2015, it simultaneously announced that it would spend $400 million through 2020 to bolster its Mexican operations. Earlier this year, the company deployed a portion of that outlay to break ground on new bottling and maturation facilities at its Atotonilco site in Jalisco, roughly doubling its production capacity to 5 million cases. —Daniel Marsteller & Carol Ward

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