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Tequila eats into luxury spirits market share

As more international drinks groups increase their investment in super-premium Tequila, research has shown the category is threatening the market share of luxury whisky and Cognac.

Celebrities such as Sean “Diddy” Combs have helped drive growth in the luxury Tequila market

According to a report by Euromonitor International contributing analyst Rob Walker, high-end Tequila and mezcal are creating some of the “most disruptive market momentum in luxury spirits” and are eating into the market share of both white and brown luxury spirits.

In the US, high-end Tequilas are now some of the fastest-growing brands in luxury spirits, driven in part by their association with celebrities, Walker claims.

Pop star Justin Timberlake part-owns Sauza 901 with Beam Suntory, while actor George Clooney launched Casamigos Tequila in 2013.

Most recently, Diageo entered into a joint venture with music mogul Sean “Diddy” Combs to acquire DeLeón Tequila, which is priced up to US£850.

Diageo claims that around 65% of all positive retail value change in the US Tequila market came from the ultra- and super-premium tiers over the last 52 weeks.

Rande Gerber, husband of model Cindy Crawford who launched Casamigos in partnership with Clooney, said volumes of the brand grew 500% in 2014, making it the fastest-growing Tequila brand in the US.

Walker also notes Tequila’s growing popularity in the on-trade, particularly in the US, Western Europe and Asia Pacific.

“Indeed, in a spirits market where recruitment of new consumers is arguably the biggest challenge, Tequila is throwing down the gauntlet to prestige whiskies, Cognacs, vodkas and rums,” he said.

“It has been happening under the radar for a while, but Tequila is now one of the coolest (and aspirational) luxury spirits on the US market, and has big-name celebrities backing it.

“We are now in the height of Tequila season, which typically runs May through September, and sales at the end of this year will give us a clearer reading on how luxury tequila is shaping up.”

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