Tequila sales overtake bourbon and rum in the United States.
Agave-based spirits now represent the third largest category of spirits, just behind vodka and whiskey in the U.S. Agave-based spirits grew a remarkable 20% in 2021 alone, outpacing the 10% growth of bourbon in the same time period. The future looks bright for agave spirits due to increasing popularity, variety and cultural engagement.
Popular celebrities have tried to capitalize on the trend. George Clooney had great success with his premium label Casamigos which he ended up selling to Diageo for about one billion dollars in 2017. The latest into the celebrity branded arena include “The Rock” with a small batch blanco tequila as well as Nick Jonas, Adam Levine and Justin Timberlake.
Between 2015 and 2020 Tequila consumption rose more than 30%. Premium branded tequilas were up over 60% in part by the familiarity and social awareness generated by celebrity associations. New product premium categories including ready-to-drink (RTD) products and flavored tequilas helped drive growth as well. New flavored tequilas including mango, pineapple, lime, chili pepper are trending higher as well as barrel-aged and small batch.
As much as the traditional the margarita remains very popular, increasingly consumers are enjoying concoctions that mirror an experience that more resembles that of bourbon or whisky. Drinking a complex tequila neat or on the rocks is increasingly popular. Even mixed drinks based on bourbon like a “tequila old fashioned’’ have added to the popularity of premium brands.
“Now that people increasingly recognize and enjoy the different nuances of this spirit, that has opened the door to interest in craft Tequila – just like we’re seeing with craft gin, craft vodka and craft whiskey.”
“These days, consumers and bartenders in the US genuinely understand and appreciate Tequila, especially 100% agave Tequilas,” says Chris Moran, founder and CEO of Ghost Tequila, a fast-growing spicy Tequila.*
Mezcal has grown at a similar pace to tequila, but represents a much smaller part of the market, somewhat like rye compares to bourbon. Mezcal has grown on the back of the popularity and cultural awareness of agave spirits and their heritage.
Consumers who have driven agave spirit popularity are nearly equally split between women and men with the age demographic nicely balanced at 46% for consumers 25-44, and 34% for those aged 45-64. Another part of agave spirits’ cultural appeal is that they are plant based and considered more natural or clean and in some way better for you.
One of the obstacles to the growth story is due to the nature of the agave plant itself. Agave plants can take up to a decade to mature. It creates a dilemma for growers who might be torn between cultivating plants for a premium aged (añejo) tequila which can take another year or more, or making a quicker return on investment with blanco or minimally aged reposado. This will make the aged tequilas either more scarce or will force prices up. With the rising popularity of premium tequilas it seems likely the industry will continue to build premium agave spirits at premium prices with the help of celebrity branding.
The future looks bright for agave spirits… watch out vodka and whisky!
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