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Tequila Thriving At Multiple Price Points, As 100%-Agave Labels Proliferate

May 4, 2012

The global Tequila category slowed to 1.5% growth in 2011, according to Impact Databank, but the U.S., by far Tequila’s largest global market, maintained a brisk growth pace, rising 5% to 12.4 million cases.

Two brands among the top five Tequilas in the U.S.—1800 and Juarez—saw volumes rise by double-digit rates in 2011. A third, Sauza, wasn’t far behind, with 9% depletions growth. Meanwhile, the category’s second-ranked brand, Patrón, picked up speed, adding more than 750,000 cases last year. Of the top five, only market leader Jose Cuervo declined. The dynamic performance of upscale brands like Patrón and 1800 and lower-priced offerings like Juarez and Impact “Hot Brand” Camarena demonstrate Tequila’s current strength across multiple price points.

Much of the attention within Tequila in recent years has been on Patrón and its competitors at the high end. But while premiumization efforts continue, a new battleground is developing with an influx of accessibly-priced 100%-agave labels vying for scarce bar and shelf space. In addition to Camarena, which only launched in 2010 and already sells over 300,000 cases, Lunazul, El Charro, El Jimador, Azul and others are competing in the segment, generally around the $20 mark.

The market leaders have also taken note of the 100%-agave opportunity. Cuervo is present with its Tradicional line—whose Silver variant has gained currency among multicultural consumers—as is Sauza, with its new Sauza Blue edition, which rolled out last June at $19 a bottle. Chris Peddy, vice president of Beam Inc.’s global Tequila unit, recently told Shanken News Daily that Sauza Blue played a key role in the brand’s U.S. growth last year, and will be “a core focus for 2012.”

For a full report covering both the U.S. and global Tequila markets, see the May 1 issue ofShanken’s Impact Newsletter.

US – Top Five Tequila Brands
(millions of nine-liter cases)
Depletions Percent Market Share
Rank Brand Importer 2010 2011E Change* 2010 2011E
1 Jose Cuervo Diageo North America 3.55 3.51 -1.0% 30.2% 28.4%
2 Patrón The Patrón Spirits Co. 1.70 1.76 3.5% 14.5% 14.3%
3 Sauza Beam Inc. 1.59 1.72 8.5% 13.5% 13.9%
4 1800 Proximo Spirits 0.69 0.81 16.7% 5.9% 6.5%
5 Juarez Luxco Inc. 0.53 0.58 10.5% 4.5% 4.7%
Total Top Five 8.06 8.38 4.1% 68.6% 67.8%
*based on unrounded data

Source: Impact Databank

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