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Exclusive: Moet Hennessy Enters The High-End Tequila Market

October 26, 2016

Moet Hennessy has entered the upscale Tequila segment through a joint venture with Mexico’s Gallardo family to produce and market Tequila brand Volcan de mi Tierra, Shanken News Daily has learned. Moet Hennessy chief executive officer Christophe Navarre called Volcan de mi Tierra “an ideal and complementary fit to our portfolio.”

Volcan de mi Tierra will roll out in the first quarter of 2017 in the U.S. and Mexico, with global expansion expected to follow in 2018. The brand will be available in Blanco and Cristalino versions. (The Cristalino style, which has become very popular in Mexico, is an Añejo Tequila with the color extracted, creating a clear Tequila with the complexity and maturity of an aged expression.) Retail pricing for the portfolio will start at $40 and range up to about $50-$60.

Upscale Tequilas are thriving in the U.S. market. Last year, total Tequilas priced at $40 and above grew by 8% to 2.9 million cases, according to Impact Databank. That segment now accounts for nearly 20% of the U.S. Tequila market, up from less than a 10% share a decade ago. Volcan de mi Tierra’s initial U.S. volumes are expected to be small, as sales in its early phase will be restricted to key markets. Beyond that, the brand will have the capacity to get as big as it needs to be, Moet Hennessy said.

Volcan de mi Tierra is produced at the Volcan distillery, located in Jalisco at the base of the Volcan de Tequila—a long-dormant volcano whose soils are considered ideal for growing blue agave. The distillery will be completely revamped as part of the joint venture deal.

The Gallardo family, whose lineage in Mexico dates back to the 17th century, controls a holding company whose subsidiaries produce cane sugar and molasses and distribute soft drinks—including bottled water and all Pepsico drink brands in Mexico. “Over the years, I’ve come to know Mr. Don Juan Gallardo and his family quite well,” said Navarre. “We’ve developed a valuable partnership that inspires us to reinforce the entrepreneurial values that Moet Hennessy represents.” —David Fleming

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