Patrón CMO concern over ‘inferior products’
Following an influx of new and recently acquired Tequila brands, Patrón Spirits’ global chief marketing officer has expressed concern over “inferior products” tainting the category.
Speaking to The Spirits Business earlier this month, Lee Applbaum said he is not worried that Patrón will lose market share following the release of new ultra-premium Tequila brands and acquisitions made in the category.
“Despite our dominant market share, the reality is there’s still tremendous room for growth in the ultra-premium Tequila category in the US and overseas,” he said. “We will keep educating the trade and telling our story, this will help us earn our fair share of the business.”
However, Applbaum added a note of caution: “My concern isn’t new brands or consolidation or acquisitions, it’s whether these companies are committed to handcrafted products.
“It’s whether they will create an inferior product and then taint the category, which will hurt us. If the big companies are interested in making great artisanal Tequila then there’s plenty of room for everyone to win.”
The super-premium and ultra-premium Tequila category has experienced a raft of new launches and acquisitions over the past two years.
In January 2014, Diageo relaunched DeLeón Tequila as part of a joint venture with rapper Sean ‘Diddy’ Combs. Just over a year later, the group completed its acquisition of the 50% stake in Don Julio Tequila that it did not already own.
“We are not one of the conglomerates, we fight the same fight as the smaller producers, but our global brand equity gives us more clout,” adds Applbaum.
The executive also addressed controversy over terms such as “craft”, “artisanal” and “small batch”, stating that consumer caution over brands that use these terms will not prompt Patrón to abandon its “handcrafted” marketing messages.
“I think small batch has been abused to say the least and grossly misinterpreted with flat out lies,” he said. “There’s no clear definition for what small batch is. People can claim they are small batch because there’s no clearly defined criteria.
“It’s become a throw away term and consumers become wary. It devalues those of us who are committed to handcrafted and artisanal products, but that’s not a reason for us to abandon it.”
He added: “We get asked how we can create three million cases and call ourselves small batch. We use tiny copper stills, tiny oak fermenters and tiny brick ovens – but we replicate this process numerous times. We are a privately held company and in my opinion a public company wouldn’t operate in this way.
“We are not the only company making handcrafted Tequila, but we are in a minority. We are small batch but large scale.”