California is biggest Tequila market in US

The biggest market for Tequila in the US is California, which saw double-digit growth in 2022.

CGA’s Tequila in North America report looked at the Tequila category’s performance in the on-trade and regionally across the US.

CGA’s BeverageTrak data showed Tequila consistently remained the third-highest velocity spirit category for 2022, despite its sales velocity dipping slightly as the year entered its last quarter.

California continued to be the biggest US state for Tequila, with velocity increasing by 17% in 2022 compared with the previous year.

However, Illinois experienced a ‘remarkable’ performance for Tequila last year, climbing by 45%.

In terms of the on-trade, food-led venues reported their ‘strongest’ performance for Tequila towards the end of the year, with a 15% velocity uplift between the third quarter and fourth quarter. However, the category’s total velocity in food-led sites fell by 7% year on year.

Drinks-led venues experienced an 18% velocity increase for Tequila. CGA noted it was significant when compared with the total spirits category, which increased by 7% in drinks-led sites.

Tequila experienced the largest velocity increase in sports bars, with a year-on-year uplift of 31% in 2022.

Early evening was also the most valuable drinking occasion for Tequila throughout the entire year, the report noted.

Tequila was consumed by 17% of on-trade consumers in the US, but it was a short distance behind whisky (20%) and vodka (21%).

In Tequila’s birthplace of Mexico, nearly half of all on-trade users consume the spirit. Furthermore, 75% of all spirits drinkers in Mexico consume Tequila, making it the country’s leading spirit.

The reposado subcategory is consumed by a third of Tequila drinkers, while extra añejo is consumed by 13% of US imbibers and 9% of Mexican consumers.

Up to 34% of Mexicans sip Tequila on its own (with or without ice) as opposed to approximately one-fifth in the US.

In the US, nearly half of Tequila consumers drink the spirit in a cocktail, compared with 37% in Mexico.

CGA highlighted Tequila-based cocktails as experiencing the highest growth last year, up by 5.4% year on year.

This is driven by the Margarita, which is consumed by more than half of American cocktail drinkers.

Tequila overtook American whiskey to become the second biggest-selling spirit category by value in 2022, according to IWSR Drinks Market Analysis, which expects the category to topple vodka from the top spot in 2023.