Tequila’s Top Players See More Runway Ahead

Along with RTDs, Tequila has been the major category growth driver of recent years for the spirits industry, expanding by more than one-third since 2019 to soar above 30 million cases in the U.S. market, according to Impact Databank. The Tequila category now counts four brands—Don Julio, Patrón, Casamigos, and Jose Cuervo—with annual U.S. retail value above $1 billion. Don Julio, the fourth-largest spirits brand in the U.S. by retail value, is approaching $2 billion, while Patrón is around $1.7 billion, Casamigos is above $1.5 billion, and Jose Cuervo is above $1 billion.

According to Impact Databank, those same four labels have been among the fastest-growing spirits brands in the U.S. in terms of 9-liter cases added over the past five years. Casamigos has tacked on nearly 2.5 million cases over the period, while Don Julio has added 1.8 million and Jose Cuervo has expanded by 1.4 million. Patrón, meanwhile, is up by 1 million cases since 2018.

Diageo’s duo of Casamigos and Don Julio continued to show strong growth last year, with Casamigos rising 5% to reach 2.5 million cases and become the fourth-largest brand in Diageo’s U.S. portfolio, overtaking Ketel One. “Casamigos grew 70% CAGR over the last few years,” said Diageo North America president and COO Claudia Schubert. Even so, she added, “the unaided awareness of Casamigos compared to leading brands in this category is small. So we see an opportunity to raise that awareness.” Don Julio grew even faster in 2023, jumping 18% to also reach 2.5 million cases.

After adding a million cases in U.S. volume from 2018-2022, Bacardi-owned Patrón took a small step back last year. But Bacardi’s North America president Tony Latham told SND that it’s generated on-premise momentum lately through newer expressions. “Patrón is playing an important role in the on-premise, where consumers are seeking breakthrough experiences,” he said. “That’s evidenced by recent share gains. Consumers are gravitating to Patrón El Alto ($179) as they mark special occasions and experiences.”

Tequila market leader Jose Cuervo likewise slipped slightly in 2023 after soaring by 1.5 million cases over the preceding four years. Current volume stands at an even 5 million cases, according to Impact Databank. Lately the brand has benefited from growth in its 100%-agave Jose Cuervo Tradicional tier, which last year debuted a Cristalino extension ($35) as an entry-level premium offering, as the Cristalino style continues making inroads across the market. “Our premium Tequilas continue to experience strong demand, outperforming the overall growth of the Tequila market” in North America, Cuervo CEO Juan Domingo Beckmann told analysts.

Most recently, Tequila in the $25-$35 range is up high single digits, outpacing the overall category. That price range includes labels like 1800, Espolòn, Teremana, Cazadores, and Milagro. “We see a slight shift out of the apex end of the price tier, even within hot categories like Tequila,” said Kevin Roberts, chief commercial officer at third-ranked wholesaler Breakthru Beverage Group. Still, he noted, “Ultra-plus Tequila is only off -3%, while value Tequila is off -18%.” Overall, the $25 and above Tequila category in the U.S. has risen from approximately 7 million cases in 2018 to 16 million cases in 2023, according to Impact Databank.—Daniel Marsteller

Tagged : Bacardi, Casamigos, Diageo, Don Julio, Jose Cuervo, Patrón, Proximo

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