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Supreme Brand Champion 2024: Jose Cuervo
Despite operating in a sector that has been flooded with new entrants, historical Tequila giant Jose Cuervo has enjoyed strong growth in 2024.
The Tequila category has been on fire in recent years, with one brand maintaining its leadership position, despite intense competition.
In this industry, it would be hard to find anyone who isn’t familiar with Jose Cuervo – a brand that operates the oldest distillery in Latin America. The family-owned Tequila is this year’s Supreme Brand Champion, after successfully growing from a large volume base in a rapidly premiumising category that continues to expand with new entrants.
As the world’s biggest-selling Tequila brand, Jose Cuervo saw its sales rise by 3.3% to 9.5 million nine-litre cases in 2023 – its fourth consecutive year of growth. In 2018, when the brand’s volumes were at 6.7m cases, our Brand Champions report featured only five other million-case Tequilas. For our latest edition, there are now 13 brands that have surpassed the milestone – signalling rapid growth in the sector in just five years.
Lander Otegui, senior vice-president of marketing at Jose Cuervo owner Proximo Spirits, says the brand’s growth has been boosted by the company’s investment in premiumisation as it launches more high-end line extensions, such as La Familia Reserva.
He also notes that the company has been “leading the charge when it comes to aged expressions”, and is driving the cristalino category with its latest release, La Familia Reserva Añejo Cristalino Organico.
This new addition is certified organic, joining La Familia Reserva Platino and Reposado variants as the brand’s latest organic offering.
The cristalino segment is expected to account for nearly 10% of all Tequila sales by 2027, according to Jose Cuervo.
RTDs drive sales
The booming ready-to-drink (RTD) category has also helped drive sales for the brand, which boasts its own line, enabling drinkers to enjoy pre-made Margaritas at home.
And Otegui cites the importance of the brand’s global expansion over the past two decades, with the brand being available in more than 160 markets.
The US remains the number-one market for Proximo Spirits’ Tequila portfolio, including Jose Cuervo. Otegui also highlights “incredible growth” in markets such as Canada, and a good performance in the UK, Spain, Australia and Asia.
Otegui recognises an opportunity to grow the brand in Europe and Asia, where Tequila is “very small” compared with the whisky category. He also notes that in Europe, where gin is popular, Tequila is a “very good substitute for gin drinks”.
“When it comes to cocktails, of course the Margarita continues to be the number one in the US, and we’re seeing a lot of innovation when it comes to the Margarita itself,” says Otegui. He is also seeing “a lot of very interesting Tequila substitutions” in cocktail menus, such as Tequila-based Old Fashioneds and Manhattans.
Last year, a report by intelligence platform Overproof found Jose Cuervo Tradicional to be the most popular Tequila brand used to make a Margarita cocktail in US bars. The Margarita retained a fifth of all cocktail sales in the US on-trade in the last quarter of 2023, remaining America’s biggest-selling serve, according to CGA from NIQ data.
This year the company will also reveal a new design for its Cuervo Tradicional line, and a new flavour for its Jose Cuervo Authentic Margaritas RTD range. The new Raspberry Colada flavour was the winner of last year’s Margarita Shake-Up contest.
“We continue to invest very heavily behind the brand,” says Otegui. “This continues to be our number-one priority globally. So we continue to invest not only in international expansion and to hold our position, but we continue to elevate the brand to evolve in terms of consumer preferences with expressions like the cristalino, which has been very successful both in Mexico and in the US as the pilot market, and also continue to offer consumers a more premium expression.
“We see a lot of movement in the luxury Tequila category. Since Covid, the category has experienced a tremendous explosion. It’s stabilising a little now, with consumers already interested in drinking high-end Tequila.”
Otegui also notes a movement from drinkers of Cognac and Scotch whisky into Tequila. “We’re well positioned to capture that consumer that’s coming over from other categories,” he says.
Untapped opportunity
He believes high-end is the “clearest untapped opportunity” for Tequila because sales in this segment are concentrated in the US and Mexico.
“I don’t think the Asian consumer, for example, who loves luxury products and high-end Cognac and high-end Scotch, has really been exposed to high-end Tequila. There’s a massive opportunity for us to grow in those areas.”
Talking about the sector’s future, Otegui says: “We want to continue seeing the success of the category for another 250 years. So we’re here to stay. We’re here for the long run. And we hope that the success continues not only for America, but for the category, because we believe that Mexico has so much to offer when it comes to spirits and Tequila.
“We want to make sure that every country and every consumer is at least aware of its existence.”
The Spirit Business published The Brand Champions 2024 report this month (June).
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