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Special Report, Part 2: Fast-Rising New Entries Make Luxury Tequila Even Hotter

August 14, 2015

The luxury Tequila category, whose impressive success has been driven in recent years by brands like Patrón, Don Julio and Avión, has seen an influx of surging new entrants that are propelling the segment to even stronger growth in 2015. Casamigos, DeLeón and Roca Patrón had combined depletions of around 75,000 cases in 2014. After a very promising first half of 2015, the three brands are on pace to sell nearly 250,000 cases in aggregate this year.

Lee Applbaum, global chief marketing officer at Patrón Spirits International, attributes the rapid rise of Roca Patrón and other new luxury offerings to consumers’ increasing penchant for “interesting and aged Tequilas.” Last year’s release of Roca Patrón ($70-$90), made from an elaborate production process in which a two-ton stone is used to crush cooked agave, has proved successful. Roca Patrón is on pace to nearly double depletions in 2015, to around 65,000 cases.

In early 2014, Diageo joined forces with entertainment mogul Sean “Diddy” Combs—also the spirits giant’s partner on Cîroc vodka—to acquire DeLeón Tequila. Diageo began marketing DeLeón in late 2014, and the brand (whose variants range from $60 to $850) shipped roughly 5,000 cases by the end of the year. After shipping around 40,000 cases in the first half of 2015, Diageo plans to reach approximately 75,000 cases by year-end. The company says DeLeón already has a significant presence in key markets like Los Angeles, Miami, New York, Chicago and Washington, D.C., and is steadily expanding its distribution footprint.

While quality is the ultimate arbiter of success, some Tequilas are also benefiting from star power. Casamigos, which has made a splash, is co-owned by actor George Clooney and entrepreneurs Rande Gerber and Mike Meldman. Clooney and Gerber’s signatures are prominent on the front label. Casamigos more than doubled its volume to reach 38,000 cases in 2014, from 17,000 cases the previous year, and is on pace to approach the 100,000-case threshold this year.

Gerber notes that the story of how the three partners initially made the Tequila just for themselves resonates with consumers, but the brand’s quality is backed up by support from the trade and various accolades. “When you have Tequila aficionados giving their stamp of approval, and bartenders and mixologists supporting the brand, it definitely helps in getting the word out,” Gerber says.

A special report on high-end Tequila appears in the August 1&15 issue of Impact.

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