Tequila could soon overtake vodka as America’s favorite spirit, fueled by consumers’ desire for expensive bottles of agave-based spirits.
Tequila and mezcal were the second fastest-growing spirits category in 2021, behind only pre-mixed cocktails. Agave-based spirits saw sales increase 30.1% from a year earlier to $5.2 billion, according to the US Distilled Spirits Council.
It was also the second-largest category by revenue behind No. 1 vodka, which has been the best-selling spirit in the US since the 1970s. With revenue of $7.3 billion, vodka still sells approximately $2 billion. dollars more a year than tequila and mezcal, but agave-based spirits could be on track to overtake them in a few years.
For more evidence of the trend, look no further than the casinos. Julian Cox, renowned bartender and chief beverage executive and corporate mixologist for MGM Resorts International, said overall sales of vodka and tequila go hand-in-hand at the hospitality giant.
“Nobody could believe it,” he said.
Using volume as a measure, vodka is still king. According to DISCUS, the spirit sold 78.1 million cases in 2021, more than double the volume of the next category: pre-mixed cocktails. Tequila and mezcal came in a distant fourth with 26.8 million cases.
High-end tequilas are helping fuel the category’s growth, according to Christine LoCascio, head of public policy at DISCUS.
“It’s not just for margaritas,” LoCascio said at the trade group’s annual economic briefing Thursday. “There are so many high-end tequilas that can be drunk and savored just like many other high-end products, such as high-end whiskeys, cognacs, bourbons and rums as well.”
Diageo CEO Ivan Menezes echoed that sentiment on the company’s recent earnings call. The distiller owns two luxury tequila brands: Don Julio and Casamigos.
“The attractiveness of the category in demographics is significant,” he said. “It has crossed. Multicultural growth is very strong. It cuts across age segments, gender, time slots, occasion, and the nature of the drinks. It’s not just about drinks and margaritas like it used to be for many years.” behind.”
The Crown Royal owner forecasts that tequila sales will expand faster than the overall spirits industry over the next five to 10 years. In the first half of its 2022 fiscal year, tequila sales increased 56% over the prior-year period.
Tequila is also helping the spirits industry steal customers from beer. Tony Abou-Ganim, celebrity mixologist and author of “Vodka Distilled,” created the beverage programs for T-Mobile Arena and Allegiant Stadium, both in Las Vegas. Sports venues have margaritas on the menu, made with fresh ingredients and 100% agave tequila.
“A lot of people think that when they go to an arena or a stadium, ‘I’m just going to drink beer,’ and our feeling was that if we put a better margarita in their hands, they’re going to buy margaritas. And that has been shown to be the case,” Abou-Ganim said.
DISCUS’s LoCascio also acknowledged that high-profile celebrity releases have helped bring attention to the category.
A host of celebrities have launched their own tequila and mezcal brands, including actor and former pro-wrestler Dwayne Johnson and model Kendall Jenner last year. In addition to jumping on the agave bandwagon, they hope to emulate the success of George Clooney’s Casamigos tequila, which was sold to Diageo for $1 billion in 2017. Last year, Constellation Brands invested in “Breaking Bad” co-stars Aaron Paul and Bryan Cranston’s Dos Hombres mezcal for an undisclosed amount.