The Tequila brands to watch in 2015By Melita Kiely
The new darling of the spirits industry is none other than Tequila. With its sweet flavour, super-premium credentials and “craft” status, brands are looking forward to a successful year ahead, but which will be the Tequila brands to watch in 2015?
Industry intrigue in the Tequila sector peaked at an all-time high when the Chinese government finally opened the country’s borders to the category last year.
Plus, with Scotch and Cognac sales continuing to decline at an alarming rate due to China’s on-going anti-corruption campaign, there has never been a more opportune time for Tequila to sell its story.
And so far, brands seem to be catering for China’s love of brown spirits quite nicely. According to figures released earlier this year by Mexico’s Agricultural Secretariat, which is responsible for overseeing the Tequila Regulatory Council (CRT), exports rose by an impressive 16% to US$568 million (£355m) in the first half of this year, compared to the same period in 2013.
Unsurprisingly then, big players such as Pernod Ricard’s Olmeca Tequila now see China as “central” not only to the development of the category in Asia, but all around the world.
Total volume sales of Tequila increased by 3% from £25.9m in 2012 to £26.7m in 2013 according to figures from the IWSR, of course largely driven by the States. However, Tequila’s burgeoning reputation in China is not the only point of interest in the segment this year.
Spotting future opportunity
There have been numerous notable acquisitions throughout the past 12 months, beginning back in January when Beam Inc bought a stake in Justin Timberlake’s 901 Tequila. In addition, Diageo has firmly set its sites on the Tequila market, first acquiring Peligroso Tequila and then more recently giving Bushmills Irish Whiskey to Jose Cuervo in exchange for complete ownership of Don Julio Tequila.
“Diageo has realised this opportunity through the breadth and depth of our portfolio,” commented Ivan Menezes, CEO of Diageo. “It delivers our strategy: to build our presence in the world’s fastest growing markets and lead the industry in the biggest growth opportunities. I am delighted we have reached this agreement.”
But that means Diageo is left without a premium Irish whiskey – one of the fastest growing spirits categories over recent years, that is predicted to continue thriving to 12 million cases by 2020. It’s a move that gives an astounding nod to the potential seen in Tequila’s future, particularly within the super-premium category.
“The US market continues to shift toward premium and super-premium and we anticipate the super- and ultra-premium sector will boom as people learn more about Tequila, and more premium options become available,” Gary Ross, senior director of Tequilas for Beam Suntory said.
Furthermore, celebrities are chomping at the bit to get their name attached to a Tequila brand or found their own, like George Clooney with Casamigos.
TEQUILA TRENDS TO WATCH IN 2015
- Marketing campaigns will be given prominence in China as the country wakes up to Tequila
- Consumer demand for luxury spirits will see a surge in popularity within the super-premium segment
- More flavoured Tequilas will be launched to cater for millennial consumers
DELEÓN AND DON JULIO
Diageo has certainly made no secret of its ambitious plans for Tequila and 2014 has been the year of acquisitions for the group. From its controversial swap of Bushmills for Don Julio to its 50/50 acquisition of the ultra-premium DeLeón Tequila, this could be Diageo’s opportunity to reaffirm its position in the Tequila market since its loss of Jose Cuervo’s distribution in 2012.
Actor George Clooney is one of a handful of celebrities tinkering with Tequila. This year witnessed the launch an añejo expression of his 100% agave Casamigos Tequila throughout the US and Canada. That leaves an abundance of opportune markets available open to the brand in the coming year.
CASA NOBLE TEQUILA
Constellation Brands acquired Carlos Santana’s Casa Noble Tequila this year, as the firm made its first foray into the category. With reported stagnant spirits sales offset by strong beer sales, the company hopes Casa Noble will “complement” its successful Mexican beer brands and leverage it existing routes to market.