Three Clear Reasons Why Tequila Sales Are Booming

Tequila is hot. Sales are way up, and the visibility of this spirit is higher than it’s probably ever been. There are now over 1500 brands on the market. According to the Distilled Spirits Council of the US, in the past 20 years, tequila volumes have grown 180%. The fastest growth has been in what are called the high end and super premium brands. High end brands have shot up 531% in the same period, and super premium brands, which barely existed 20 years ago, have soared an incredible 1042% in the same time period.

Tequilas made from 100% agave are what’s fueling the growth. The Tequila Regulatory Commission of Mexico announced in 2018 that exports of 100% agave tequila finally outpaced the 51% agave “mixto” tequilas that are adulterated with cane sugar and other flavorings and colorings. It’s usually those cheaper and lower quality tequilas that give the spirit a bad reputation that some people remember from getting bad hangovers after college parties.

What distinguishes tequila from other distilled spirits? Tequila is recognized around the world as a Mexican designation of origin product. Mexican law states that tequila can only be produced in the state of Jalisco, where the town of Tequila, its birthplace is, and and a handful of municipalities in a few other states. It’s produced from the blue agave plant. The core of the plant is harvested, baked to convert its sugars to simple fructoses, and then mashed to extract its sweet juices, which are then fermented and distilled.

Here are three reasons why tequila is booming.

Pandemic drinking at home

The Covid-19 pandemic certainly is responsible for a marked shift towards drinking at home and has boosted the sales of all alcoholic beverages, and it has definitely helped sales of higher-end liquor. Premium spirits like many of the tequilas being offered today allow people to create an upscale experience at home. And it won’t break the bank, since a 750 ml bottle of a premium tequila might only cost a bit more than what you’d pay for a couple of shots of it at a bar. And aged, more complex types of tequilas, such as reposados and anejos, are competing with higher-end whiskey and cognac as choices for that special toast or tasting experience.

Star power

Another reason is definitely the celebrity factor. With everyone from George Clooney to Dwayne “The Rock” Johnson and Justin Timberlake launching their own tequila brands, it’s put the spirit under a bright spotlight. Some of the most successful brands in recent years have been celebrity ones, and ordinary people have long been drawn to products associated with the glitterati. Thousands of social media posts by both celebrities and other influencers have introduced it to a new, younger audience as well.

Distinctive brands

Here are three examples of tequila brands that occupy various niches that have helped drive the boom in popularity.

Patron started the premium tequila category just over 20 years ago. It was a venerable, if somewhat sleepy brand until the rights were bought by a few American entrepreneurs who kicked the marketing into high gear. By cultivating an aura of taste and sophistication and packaging it in individually numbered bottles,

Patron went after the audience of premium vodka drinkers in trendy nightclubs and bars. Before long it was being name-checked in songs by both country singers and rappers, and the brand became a part of popular culture. Its purchase by Bacardi, the world’s largest privately held spirits company in 2018 for over $5 billion gave it peerless marketing and distribution muscle.

Casamigos typifies the celebrity premium tequila niche. Co-founded in 2013 by A-list actor George Clooney and two other partners, it brought Hollywood sparkle and chic to the spirit. It was originally started as just a passion project for their own use, with no intention of bringing it public. The casual, intimate name, a combination of the Spanish words for “house” and “friends” reinforced its laconic vibe.

The huge multinational beverage company Diageo purchased the brand in 2017 for $700 million, with up to $300 million more coming to the founders based on long-term performance targets. The cost of the deal is equivalent to Diageo paying $500 per bottle. The bet seems to be paying off, however; sales have increased since the purchase went through from 100,000 to 1 million cases a year.

AsomBroso is a tequila brand that exemplifies the up-and-coming, disruptive ultra-premium artisanal niche. From its unique blends, including a pink tequila aged in red wine barrels, and extended aging of up to 11 years of its anejos, to its unique bottles, hand-made by glassblowers on the island of Murano in Venice, Italy, AsomBroso has raised the stakes for the category but still offers products at a variety of price points.

And for tequila fans who dream of having their own brand, AsomBroso is offering shares of the company with an investment minimum of under $500.

So brush aside any old memories of pounding down cheap tequila shots, licking salt off your hand and sucking a lime wedge. It’s on the back bar shelf and in home liquor cabinets now with the finest single malt scotch and cognac. Tequila has been reborn.