The Tequila and mezcal brands to watch in 2018By Amy Hopkins
It’s been a fruitful year for the Tequila category, which experienced a flurry of acquisitions and line extensions. We name the brands poised for further success in 2018.
Mexico’s agave spirits have been hot talking points over the past year, with a raft of new brands, line extensions, distillery expansions and acquisitions adding fuel to consumer and industry interest in the category.
According to Euromonitor figures, Tequila and mezcal are predicted to grow joint global volumes by more than 10 million litres in 2017 – a clear sign of the number of new players on the market today.
This year, trade body the Distilled Spirits Council released data showing that sales at the super-premium end of the Tequila spectrum have grown by 706% in the US since 2002. Meanwhile, in the UK – another key Tequila market – value sales have shot up by 37% in two years as drinkers swap shots for cocktails and higher-end neat serves, according to the Wine and Spirit Trade Association.
But can this impressive growth continue? “Fortunately, there’s no sign of any slowdown in the Tequila category,” believes Lee Applbaum, global chief marketing officer for Patrón Spirits International, maker of the the namesake ultra-premium brand. “And when you consider how small this category is – especially compared with whisky, vodka, etc – there’s certainly still a lot of runway for continued growth globally.”
Applbaum adds that in the future, the Tequila category is likely to focus on education in markets where the spirit is already present, rather than opening up new markets.
“Tequila is already in many of the largest spirits markets in the world – China and Brazil, for instance – but arguably it’s such a tiny category, which means the potential is enormous. There’s still so much discovery to happen in the global Tequila category.”
International drinks groups have an acute sense of Tequila’s potential, and some have made transformational acquisitions in the category. In June this year, following its purchase of Don Julio in 2014, Diageo agreed to acquire George Clooney’s Casamigos Tequila brand for an eyewatering US$1bn.
US drinks group Luxco ramped up its presence in Tequila this year by building a new Jalisco distillery in partnership with Destiladora González González.
Following its acquisition of Fabrica de Tequilas Finos last year, Amber Beverage Group launched Rooster Rojo Tequila. This year, Mantas Zlatkus, global brand director for Tequila at Amber Beverage Group, spoke to SB about the continuing pricing pressure on agave, which has caused “producers’ profits to plunge a lot”.
Growth in mezcal has also been remarkably rapid. In 2016, Mexico exported 2.7m litres of the spirit, compared with just below 648,000 litres in 2011, according to the Regulatory Council of Mezcal.
Two acquisitions spurred debate over the involvement of international drinks groups in artisanal mezcal: in February, Bacardi bought a minority stake in Ilegal Mezcal, and Pernod Ricard purchased a majority stake in Del Maguey Single Village Mezcal in June.
Click through the following pages to see which Tequila and mezcal brands we believe are ones to watch in the year ahead.
Following its jaw-dropping US$1bn takeover of Casamigos Tequila, founded by Hollywood actor and director George Clooney, Rande Gerber and Mike Meldman in 2013, Diageo will focus on expanding the presence of Casamigos in both its key US market and internationally. The brand is predicted to sell 170,000 cases in 2017.
Launched by Amber Beverage Group this year, Rooster Rojo has three expressions – Blanco, Reposado and Añejo – and is filtered through Mexican silver to create a “softer and smoother finish”. Amber Beverage believes the brand can sit among the “top 100% agave Tequilas in the world over the next five years”.
Pernod Ricard plans to widen the distribution of Del Maguey pretty rapidly, following its acquisition of the brand. Despite concerns from the mezcal community, the group has stressed that it is possible for Del Maguey to scale up in the “traditional way, without changing the quality”.