World Spirits Report 2022: Tequila & mezcal
The rising demand for premium spirits, and a consumer love of agave-based cocktails has led to a Tequila and mezcal domination in 2022, and it’s only going to become bigger for the Mexican spirits categories.
In a report from CGA by Nielsen IQ, Tequila was found to be the preferred spirit of US drinkers in 2022, with many opting for the agave-based spirit over higher-end brown options.
Tequila’s share of on-trade spirits sales has risen from 11.5% to 16% since 2016, according to CGA figures. Forecasting platform researchandmarket.com found 50% of Tequila drinkers preferred cocktails as their agave-based serve of choice, with ranch waters, Palomas, and Oaxacan Old Fashioneds among the most popular, and the Margarita once again taking the top spot in the list of the US’s most popular cocktails.
Premiumisation in the category has also had a positive effect on its growth. Sales of luxury spirits in the US grew by double digits in the second quarter of 2022, with Tequila seeing an increase of 43%, according to the Luxury Brand Index released by the Distilled Spirits Council of the US (Discus).
This year, Patrón Tequila took its first step into the prestige category with the launch of Patrón El Alto, and the unveiling of the Patrón en Lalique Serie 3, the brand’s third collaboration with the luxury glassmaker.
The power of premiumisation hasn’t gone unnoticed by the big firms. 2022 saw Diageo acquire flavoured Tequila brand 21 Seeds in support of the company’s participation in the super-premium flavoured Tequila segment.
Pernod Ricard took a majority stake in Código 1530 ultra-premium and prestige Tequila, and Suntory chief executive Takeshi Niinami told The Financial Times the company was looking to add Tequila and mezcal brands to its portfolio in a premiumisation push.
While the monopoly held by the Consejo Regulador del Mezcal, mezcal’s certifying body, was halted in 2021, the freeing effects only started to be felt in 2022, according to Lou Bank, founder of nonprofit Sacred, and co-host of the Agave Road Trip podcast: “It has taken a while for brands to get comfortable with the idea that it’s for-real change,” he says.
“With that change, we’re starting to see more mezcal being made in other states than Oaxaca, which has to be a welcome relief.”
Deano Moncrieffe, co-owner of London agaveria Hacha, has noticed a shift in consumer desire for artisanal spirits, and noted that default habits have changed: “Customers don’t just want to try our agave selection, they want to learn,” he tells us.
As mezcal is being talked about more, innovation in the category is expected to increase. Bank believes industrialisation will come into play to keep up with demand, though he thinks “we will continue to see the pre-industrial, small batch stuff because there’s a market for it”.
Brands to watch in 2023
Código 1530 is said to be in the early stage of its global expansion, with a presence in more than 30 markets, and availability in all 50 states in the US. Now, with the backing of Pernod Ricard following a majority-stake investment from the French firm in October, we think it’s safe to say things are going to start ramping up for this brand in 2023.
Pernod Ricard took Olmeca Tequila in a new direction this year, with a bottle refresh designed to showcase the spirit’s fun side, and attract a party-going audience. This was followed by the unveiling of the industry’s first virtual influencer to drive engagement and brand advocacy among drinkers aged between 18 and 28. We predict more innovative Gen Z-focused activations going forward.
The Lost Explorer Mezcal
According to year-on-year sales data from UK distributor Proof Drinks, this artisanal mezcal brand is on track to deliver volume growth of more than 1,000% in the UK in 2022, compared with the same period in 2021. Next year will see the brand’s expansion plans go up a gear, with line extensions scheduled internationally. We can also expect to see more high-profile key accounts, such as The Four Seasons, take on the liquid, as well as further marketing activities with the likes of Annabel’s and The Auberge Group.