Thursday, December 7, 2023

Is tequila about to become the United States’ favorite liquor?

Tequila could become the United States’ best-selling liquor in the coming years if the strong sales growth it recorded in 2021 continues.

Data from the Distilled Spirits Council of the United States (Discus) shows that tequila and mezcal sales increased 30.1% last year to US $5.2 billion. All but 2% of that revenue came from tequila sales.

The agave-based spirits category was the second highest selling category after vodka, sales of which increased by a more modest 4.9% to $7.3 billion. Vodka has been the United States’ favorite liquor since the 1970s.

The tequila/mezcal category was also the second fastest growing spirit category after premixed cocktails, which recorded growth of 42.3% to total sales of $1.6 billion.

Discus spokeswoman Christine LoCascio said that premium tequilas are contributing to the strong growth of agave-based spirits in the United States.

“It’s not just for margaritas,” she said at the trade association’s annual economic briefing last week.

“There are so many high-end tequilas that you can sip and savor like many other high-end products, like whiskeys and cognacs and bourbons and high-end rums as well.”

The CEO of multinational beverage firm Diageo, whose brand portfolio includes Don Julio and Casamigos tequilas, made similar remarks during a recent earnings call.

“The category’s appeal across demographics is significant,” Ivan Menezes said.

“It has crossed over. The multicultural growth is very strong. It cuts across age segments, it cuts across gender. … It’s not just shots and margaritas as it used to be many years ago,” he said.

Menezes predicted that tequila sales will grow more quickly than the spirits sector as a whole during the next five to 10 years.

Diageo’s tequila sales increased 56% in the last three months of 2021 compared to the same period a year earlier.

LoCascio said that mezcal sales are also growing but noted that the spirit – made with any type of maguey – is “still a very small portion” of the broader agave category it shares with tequila, made exclusively from blue agave.

With reports from CNBC 

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