Tequila Driving The U.S. Spirits Category, Led By Super-Premium Tier
August 6, 2024Tequila continues to be the star performer in the spirits category, having roughly doubled in size in the U.S. over the past eight years. According to Impact Databank, Tequila outpaced the overall spirits market with 5% growth to nearly 31 million cases in the U.S. last year.
The super-premium segment, retailing from $25-$40 a bottle, has emerged as the price tier to watch lately, delivering 13% growth in 2023, led by brands including 1800 (Proximo), Espolòn (Campari), Teremana (Mast-Jägermeister US), Cazadores (Bacardi), and Milagro (William Grant). But growth continues to be widespread in the category overall, with 17 of the 25 largest Tequila brands in the U.S. posting volume growth last year.
Jose Cuervo continues to dominate the market from a volume standpoint, roughly double the size of second-ranked Patrón, which sells higher up the pricing ladder. While Jose Cuervo’s volume was down slightly last year, the brand has tacked on more than 300,000 cases since 2020, even as competition has heightened in the marketplace. Brand owner Proximo continues to see higher-priced offerings like 1800 and Gran Coramino take share within the portfolio in line with its premiumization strategy. In the second quarter of this year, Proximo’s U.S. business saw “solid growth in volume and value driven by the strong performance of key Tequila brands,” Cuervo CEO Juan Domingo Beckmann told analysts.
Along with 1800, two brands driving gains in the $25-$40 segment are Espolòn and Teremana. Espolòn was up 23.2% to 1.37 million cases last year and has added 1 million cases since 2018, ranking seventh among all Tequila brands nationally. “We’ve invested a lot in brand-building on Espolòn, and it’s at a sweet spot from a pricing perspective. We’ve also ramped up a huge amount on production capacity,” says Melanie Batchelor, managing director, Campari America.
Teremana, the brand from Dwayne “The Rock” Johnson and partners, is also investing to boost output. “We’re currently in the process of expanding our distillery in Jesús María,” says Teremana CEO Richard Black. “This expansion will enable us to uphold our small-batch process while meeting the increasing demand from consumers in the U.S. and on an international scale.”
At the category’s higher price tiers, Diageo-owned Casamigos has tapped the innovation pipeline recently, introducing a Jalapeño Tequila this year at $50 a 750-ml. Portfoliomate Don Julio has outpaced Casamigos in the U.S. lately, rising 15% by volume last year. “Don Julio leads as the number-one share gainer within the Tequila category,” Karen Harris, vice president of Don Julio at Diageo, tells SND.
Patrón remains the leader of the above-$40 segment, which also includes Don Julio, Casamigos, Herradura, DeLeon, and Maestro Dobel and totals 8.3 million cases in the U.S. In recent days the brand released a new Cristalino expression retailing at $79 a 750-ml. That followed two high-end bottlings, El Alto and El Cielo. “We’ve seen a halo effect from these prestige variants on our core portfolio,” Patrón vice president of marketing D-J Hageman tells SND.
| Million-Case Tequila Brands in the U.S. (thousands of 9-liter cases) |
|||||
| Brand | Importer | 2022 | 2023 | Percent Change1 |
|
|---|---|---|---|---|---|
| Jose Cuervo2 | Proximo Spirits | 5,060 | 5,020 | -0.8% | |
| Patrón | Bacardi USA | 2,944 | 2,603 | -11.6% | |
| Casamigos | Diageo North America | 2,380 | 2,450 | 2.9% | |
| Don Julio | Diageo North America | 2,075 | 2,375 | 14.5% | |
| 18002 | Proximo Spirits | 2,010 | 2,100 | 4.5% | |
| Hornitos | Suntory Global Spirits | 1,620 | 1,675 | 3.5% | |
| Espolòn | Campari America | 1,110 | 1,368 | 23.2% | |
| Lunazul | Heaven Hill Brands | 918 | 1,266 | 37.9% | |
| Teremana | Mast-Jägermeister US | 850 | 1,002 | 17.9% | |
| Total Million-Case Brands | 18,967 | 19,859 | 4.7% | ||
| 1 Based on unrounded data. 2 Excludes premixed cocktails. Source: IMPACT DATABANK © 2024 |
|||||
Tagged : 1800, Casamigos, Don Julio, Jose Cuervo, Patrón
