Patrón Expanding Into Cristalino Segment As Top-End Competition Intensifies
July 11, 2024While there’s been some slowing at the top of the Tequila category over the past year, the luxury segment has expanded dramatically over the medium term, with bottlings retailing at $40 and over more than doubling to 8.1 million cases in the U.S. since 2018, according to Impact Databank.
While the landscape for luxury Tequilas has continued to widen, the category’s preeminent brand has remained the same: Patrón. “The Tequila category has experienced incredible growth, with a 5% increase in volume in 2023,” notes D-J Hageman, vice president of brand marketing for Patrón. “Patrón has not only maintained its longstanding lead as the no.-1 super-premium Tequila in the U.S., with Patrón Silver driving this, but the no.-1 Tequila in the U.S. overall by value.”
Patrón saw U.S. shipments slip to 2.6 million cases last year from 2.9 million cases a year earlier, according to Impact Databank, but it remains the second-largest Tequila overall in volume after Jose Cuervo, despite its lofty price point. It’s also one of only four Tequilas with U.S. retail value above $1 billion, along with Jose Cuervo, Don Julio, and Casamigos.
Hageman points to two of Patrón’s higher-end offerings—El Cielo ($129), a blanco Tequila distilled four times, and El Alto ($179), a blend of Extra Añejo, Añejo, and Reposado—as areas of growth in the portfolio. “We have seen phenomenal growth with these variants, which are projected to outpace category growth over the next five years,” he tells SND. “We have seen a halo effect from these prestige variants on our core portfolio.” He adds that the return on sales in accounts that carry El Alto and El Cielo is four times greater than in accounts without the pair. According to Impact Databank, El Cielo jumped out to 35,000 cases last year in its debut.
Looking ahead, Patrón is set to expand into another hot area of the market: Cristalino Tequilas. The release will hit shelves later this year. The brand has also aimed to capitalize on consumer interest in Reposado Tequilas and spicy Margaritas, hosting a series of events during Miami’s F1 race weekend. The campaign, says Hageman, was a huge success, generating hundreds of millions of media impressions, both paid and organic. Patrón is continuing its partnership with Formula 1 and the Las Vegas Grand Prix, once again working with F1 driver Checo Perez.
While acknowledging increased competition, Hageman expects Patrón to continue to lead the way forward at Tequila’s high end. “The future of Tequila in the U.S. is bright, with the next five years poised for incredible innovation and growth,” he says. “The prestige segment is particularly exciting, with projections suggesting it will double in size by next year. This is largely due to consumers seeking out premium, high-quality Tequilas.” —Shane English
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