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Diageo CEO: Tequila growth ‘steady, not explosive’ outside the US
After delivering a ‘strong performance’ across its Tequila brands, Diageo has forecast consistent growth for the agave spirit in markets outside the US and Mexico.
The drinks giant saw its Tequila sales soar 79% in its 2021 fiscal year, following the category’s strong growth of 25% in an otherwise difficult fiscal 2020.
Tequila was particularly crucial to the firm’s North American business, led by high-end products; añejo expression Don Julio 1942 has become the largest prestige-and-above brand in the US by volume and net sales value, the business reported.
Speaking at the firm’s full-year results press briefing, CEO Ivan Menezes said he expects Tequila’s growth to be “steady”, “not explosive”, in markets beyond North America.
“The trend is picking up outside the US and Mexico, but it will be slower,” he explained. “You see it in top-end bars everywhere… We do expect it to grow, especially on the premium end.”
The agave spirit accounted for 8% of Diageo’s net sales in fiscal 2021, boosted by its Don Julio and Casamigos brands – the latter of which hit the million-case-selling mark for the first time last year.
Menezes said Tequila benefits from an association with health and wellness – one of “four big trends happening in most parts of the world”. He also identified premiumisation, a “willingness to spend money in lower-tempo occasions” and convenience as trends to watch.