Tequila and mezcal brands to watch in 2019By Melita Kiely
Acquisitions, the agave shortage and a raft of new lines thrust Tequila and mezcal into the spotlight last year. We predict the brands to keep an eye on in 2019.
Enthusiasm for Mexico’s hottest spirits shows no signs of abating. Combined, Tequila and mezcal’s growth is impressive, with volumes rising by 5.1% in 2017 to 33.6 million cases, according to Euromonitor. This is forecast to continue into 2018, with sales set to increase by 4.5% to reach 35.1m nine-litre cases.
“The market for Tequila is burgeoning,” says Matthew Sykes, director, international marketing, Patrón Spirits International, which was bought by Bacardi this year. “People are now consuming Tequila in new ways, and there is a desire for different flavours and ranges, bringing more opportunities for on-trade operators and retailers alike. Premiumisation of the category is a large reason behind the growth in Tequila sales.”
Since Bacardi’s takeover, Patrón has released new expressions – including a pineapple-flavoured Tequila as part of its Citrónge range, the first single-estate bottling and the first smoky expression, called Gran Patrón Smoky. The brand also partnered with leading mixer manufacturer Fever-Tree to create Fever-Tree Citrus Tonic Water to push the Tequila and tonic combination.
“As we see consumers all over the world increasingly shifting to Tequila cocktails, this is the time to think about innovation as products designed to be mixed in signature cocktails,” explains Sykes.
However, the agave shortage is still causing supply issues, exacerbated further by growing consumer demand for Tequila, putting the category in a catch-22 situation.
“With the increasing popularity of Tequila, the category has been facing challenges with the agave shortage,” says Dr Tina Ingwersen-Matthiesen, family member and member of the Borco board, owner of Sierra Tequila. “Nevertheless, we were able to strengthen our Tequila portfolio internationally this year and were able to enter new markets. With the growing interest in Tequila, its production and agave, the category has been dynamic.”
The US remains Tequila’s biggest market after Mexico, consuming 155.9m litres in 2017. Elsewhere, Raffaele Berardi, CEO of Fraternity Spirits, which produces Corralejo Tequila, notes: “Overseas, Asia still is not defined as a clear trend like the US and Canada. Europe is increasing its interest, but has opportunities for greater education.”
Actor George Clooney has undeniably played an important role in helping to raise Tequila’s profile in recent years – and mezcal could benefit from the same celebrity endorsement. In February, Clooney and Diageo – which bought Clooney’s Casamigos in a deal worth up to US$1 billion in 2017 – released Casamigos Mezcal, the first line extension from the brand.
However, while the rules and regulations that govern Tequila and mezcal’s production processes differ, increased popularity will again put added pressure on both spirits.
Click through the following pages to see which brands we believe are ones to watch in the year ahead.
There’s big money being splashed about in the Tequila world, most notably by Bacardi, which bought Patrón in April. Bacardi CEO Mahesh Madhavan told The Spirits Business this year that the company is working to increase Patrón’s capacity by “close to 50%” – a scaling up that will be carried out in three stages.
And with Patrón’s sales growing by 5.1% in 2017 to reach 2.6m nine-litre cases, according to Brand Champions data, we could see significant developments for the Tequila brand in the coming year.
When any brand breaks through the million-case barrier, it’s sure to be one to keep on your watch list. When a spirit in one of the world’s fastest-growing categories – and one that’s owned by the world’s leading spirits producer, Diageo – manages this feat, all eyes will be eager to see if it can maintain such coveted levels of success.
We are, of course, talking about Don Julio, which joined the million-case sellers in 2017 with a 50% growth spurt. Can the Tequila continue to produce similar levels of success?
Diageo’s confidence in agave-based spirits is evident, given the company’s brand acquisition streak of the past two years. This year, Diageo extended its reach further by buying Pierde Almas mezcal in an effort to develop the category in Mexico and around the world.
It will be interesting to observe how the brand will sit alongside Diageo’s other mezcal, Casamigos, which enjoys celebrity muscle from Clooney and his gang.