Supreme Brand Champion 2017: Patrón
Patrón Tequila’s consistent and multi-faceted success has propelled it to clinch the Supreme Brand Champion 2017 title. The brand’s chief marketing officer, Lee Applbaum, sheds some light on the ultra-premium spirit’s winning strategy.
There are very few spirits that can, throughout their lifetimes, claim similar levels of success to Patrón Tequila. The brand has both sustained consistent year-on-year volume increases and almost single-handedly led the establishment of one of the world’s hottest spirit categories right now – ultra-premium Tequila.
Patrón has also embarked on an extensive consumer education mission, enhanced Tequila’s international footprint, successfully promoted itself as an authentic ‘artisanal’ spirit, and demonstrated that Tequila has the potential to compete with any number of ‘luxury’ spirits, or even products.
Such activity has allowed Patrón to swipe the title of Tequila Brand Champion three times. Its volumes are relatively small compared with others listed in The Brand Champions 2017, but its consistently solid volume increases and the wider significance of its ambitious endeavours mean that it is indisputably worthy of the Supreme Brand Champion 2017 title.
Patrón has experienced significant volume gains for a number of years, but hailed a particularly impressive uptick in 2016, when sales grew by almost 13% to hit 2.47 million cases.
According to Lee Applbaum, chief marketing officer at Patrón Spirits International, the brand benefited from the “tailwind” of the overall growth of ultra-premium Tequila, itself spurred by soaring consumer interest in Mexican food, drink, culture and heritage. However, Patrón outperformed the competition for a number of reasons, he says.
In addition to growing its international footprint and seeing the “fruits of early labours of investment” in certain markets, Patrón “continued to experience strong performance” for its Roca line extension. Patrón also “intensified” its marketing efforts towards the on-trade, in particular promoting the “artisanal, hand-crafted side” of the business. “For decades, we have gotten credit for the swagger of our brand – the image side – but not the credit we thought we deserved for the authenticity,” says Applbaum. “Last year we really began to see the fruits of those labours as mixology in the trade really began to respond to these efforts.
“The fact that we appropriately reached out to partner with this side of our business and to communicate the authenticity of our brand has been a really important part of our growth.”
One way that Patrón ramped up its partnership with the on-trade last year was through its Margarita of the Year competition – which has the ancillary purpose of making the brand synonymous with the classic Tequila-based cocktail.
For Applbaum, the reaction to the competition, which launched three years ago, “exceeded expectations”. He adds: “The Margarita is one of the world’s most important cocktails, important in terms of volume, and certainly in terms of its recognition, and it is certainly one of the most important Tequila-based cocktails. And yet it is one that we took for granted for many years, and we didn’t really embrace it.”
As such, Patrón embarked on an international search to discover the most impressive “local interpretations” of the Margarita. “Last year, we really leaned into the competition in earnest and saw tremendous results,” says Applbaum. “Not only in terms of trade engagement but also the consumer reaction through digital and social media.”
Over the past year, Patrón has also managed to retain its impressive market share at a time of unprecedented competition in the Tequila category, as a swell of new brands enter the market.
“No question, the number of new entrants is staggering,” concedes Applbaum. “I think there are more than 1,400 brands of Tequila out there today, and a lot of that is because it’s the ‘it’ category. We have been doing this for 28 years, and we have always had a long-game outlook.”
For Applbaum, who joined Patrón in 2013, brands that are “interested in investing the time and certainly the financial resources to make artisanal Tequila” will be a positive force within the category. However, he fears that some news brands are simply trying to “harvest profits” while the category is hot and are making inferior products.
Nevertheless, Patrón will continue to tout its artisanal credentials and educate new consumers long into the future. The brand is not intending to enter new markets in the year ahead, but will continue its work on cultivating those important cocktail markets in which it already has a presence. But with such an impressive history, can Patrón sustain its growth?
Applbaum is confident: “If you look at the size of the category, it still has a long growth trajectory, considering you have so many consumers and trade members who do not yet fully understand the virtues of artisanal Tequila. What if we could begin to approach the share of gin, vodka, rum or Cognac in some of these target markets? It’s very easy to imagine that our growth could continue. It’s not easy work; it’s hard work, and it’s hard work especially as a luxury brand, because we not only have to perform as a spirit and within the category, we have to continue to maintain our equity as a luxury brand.”
And that is precisely what has made Patrón’s multi-faceted success so impressive.
See the adjacent column to discover the spirits that sold more than 1m cases last year, as well as The Brand Champions 2017 of each individual category.