Tequila’s Luxury Tier Tops 6 Million Cases, Doubling In Four Years’ TimeJune 7, 2022
Tequila’s U.S. case volume has more than doubled since 2010, and the category is one of the most dynamic in the spirits sector again this year. In 2021, Tequila depletions in the U.S. advanced 14.5% to 24.35 million 9-liter cases, according to Impact Databank, overtaking the rum category. What’s more, the luxury tier, which includes brands priced at $40 or more at retail, now accounts for a quarter of overall volume. Luxury-priced Tequilas jumped 18.5% to just over 6 million cases in 2021, with the segment roughly doubling in size compared with just four years ago.
“It’s incredibly exciting times,” says Chloe Lloyd-Jones, vice president marketing for Bacardi-owned Patrón, which has expanded by more than 800,000 cases in the U.S. over the past three years despite battling supply issues. “The Tequila category is booming.”
Long the standard-bearer for luxury Tequila, Patrón has been joined at the upper reaches of the category by two recently-minted million-case players from Diageo—Don Julio and Casamigos—both of which soared last year. In April, Don Julio added to its lineup with Primavera, a limited-release Reposado finished in casks that held orange-peel macerated wine, which retails at $149 a 750-ml. About 26,000 cases of Don Julio Primavera are being released for 2022.
“Right now the prestige Tequilas are the fastest growing category in the U.S.,” says Craig Johnson, vice president of marketing for the agave portfolio at Pernod Ricard USA, adding that Pernod’s Avión brand is thriving, especially at the top end. “We’ve had phenomenal success with Reserva,” Johnson says of the luxury label that retails for around $140 a 750-ml. bottle.
“The fortunate reality today for the Tequila category is that we’re experiencing growth and great reaction from consumers everywhere from Seattle to Georgia,” adds Jesús Ostos, brand director for Tequilas at Brown-Forman, where the Herradura brand has been in high gear lately.
Tequila’s surge shows no signs of slowing. In fact, 2021’s stellar numbers would likely have been higher had it not been for the supply challenges that vexed some major players. Don Julio, Casamigos, Patrón, and others experienced supply issues due to pandemic protocols, unprecedented demand, shipping challenges, labor shortages, and other factors.
“There’s no doubt that through the pandemic, we faced some challenges,” says Lloyd-Jones. “We had to put protocols in place such as social distancing, and because we remain committed to the handcrafted process, that did slow us down for a time. But the great news is that we are not dealing with any supply issues at this time,” she tells SND.
With all the growth at the top end, Tequila’s above-$40 tier continues to see a steady stream of new players. Already among the brand leaders with Maestro Dobel, this spring Proximo unveiled Gran Coramino Tequila ($50) in collaboration with entertainer Kevin Hart. Elsewhere, Mark Wahlberg recently joined Flecha Azul Tequila as owner-partner along with co-founders Abraham Ancer, a Mexican PGA golfer, and Mexican entrepreneur Aron Marquez.
NBA icon Michael Jordan and partners launched the high-end Cincoro brand in recent years and have seen it grow to about 75,000 9-liter cases, with the range running from a Blanco at $70 up through an Extra Añejo at $1,600. Meanwhile, current NBA player James Harden took a stake in the Tequila Gran Diamante brand this year, while LeBron James is active in the category with the Lobos 1707 label. We’ll have a full report on Tequila in Impact’s June 1&15 issue. Click here to subscribe.—Terri AllanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
Tagged : Avión, Casamigos, Cincoro, Don Julio, Patrón
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