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Jose Cuervo Rebounds In First Full Year With Proximo, Ending Long Decline

February 11, 2015

While other white spirits types have seen growth slow or end altogether, Tequila continues to climb steadily in the U.S., its biggest market by far. The category has averaged 3%-5% annual growth in the U.S. over the past half-decade, and was up by around 3% in 2014 to around 14 million cases, according to Impact Databank.

Although high-end offerings like Casamigos, DeLeón and Avión have gotten a lot of attention of late, Jose Cuervo continues to maintain an outsized presence in the Tequila category, where its share lingers around 25% even after years of encroachment by upstart competitors.

From 1990-2007, Jose Cuervo enjoyed a remarkable growth run under the stewardship of Diageo North America, as its U.S. sales nearly doubled, from less than 2 million cases to nearly 4 million cases. Like many other leading spirits brands, Jose Cuervo lost ground when the downturn hit the market in 2008. While most of its counterparts soon resumed their expansion, though, the Tequila leader kept sliding, surrendering more than a half-million cases in annual sales from 2007-2013. In mid-2013, after a long partnership with Diageo, Casa Cuervo placed its flagship brand with Proximo Spirits, its U.S. subsidiary, which had already been handling the Mexican producer’s 1800 Tequila.

 

After six straight years of declines, Jose Cuervo enjoyed modest growth in 2014, its first full year with Proximo, with a 0.9% bump to 3.4 million cases. While the Tequila was one of a host of blockbuster brands in Diageo’s lineup, it’s undeniably the centerpiece of Proximo’s portfolio, whose second-largest brand—Three Olives vodka—is more than 2 million cases behind Cuervo.

Proximo has worked intently to reinvigorate the Cuervo franchise over the past 18 months, unveiling a new TV ad campaign that celebrates the brand’s heritage and backing the launch of Cinge, a cinnamon-flavored extension, with a $10 million media spend.

Jose Cuervo was the lone Tequila entry among the U.S. spirits market’s top 25 brands in 2014, according to Impact Databank. At roughly 2 million cases apiece, Patrón and Sauza stand just outside the top 25, but both Tequila brands have shown encouraging growth trends in recent years and will likely crack the list in the near future.

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