Tequila Traits in 2024 | Cheers

Tequila has been an business darling in current time. Double-digit development on this class has helped lead the general spirits market increased for years now. How for much longer can the growth occasions proceed for agave spirits? 

One potential reply: Take a look at whiskey. This different stylish class exploded in reputation years earlier than tequila’s fast rise. Tequila has all the time appeared a couple of years behind the trajectory of brown spirits, as extra bourbon drinkers found that additionally they loved the candy profile and comparable complexities of agave alternate options. 

Whiskey has now cooled off. Its personal annual double-digit beneficial properties have come down, approaching if not reaching the respectable single digits. After the mixed tequila and mezcal class grew 17% in 2022, based on the Distilled Spirits Council of the U.S., will these spirits observe bourbon decrease? Is dependent upon whom you ask.

“The tequila market is stronger than ever,” says Mike Moreno, proprietor of Moreno’s Liquors in Chicago, a Beverage Dynamics Prime 100 Retailer, and the biggest vendor of agave spirits in America. “Tequila gross sales are up 20%. Cask energy tequila gross sales are up 25%. In 2023, tequila was purported to outpace vodka by the top of the 12 months. As an alternative, it ended up outperforming vodka by the top of Q2. That’s how rapidly it’s rising.”

From the standpoint of the center tier, the outlook can be optimistic however extra modest.

“As a class, development has slowed fairly considerably over the past 12 months as the general spirits business has additionally seen some softness,” says Zachary Poelma, Southern Glazer’s Wine & Spirits SVP provider technique & insights. “Tequila continues to outperform, and we consider will achieve this in 2024, however not on the similar fee we noticed in 2022 or 2023. “


“We count on tequila to develop modestly in 2024 within the low-single digit vary, which we expect nonetheless outpaces total spirits whenever you exclude RTDs,” he provides. “The worth worth tier trailed in efficiency versus the remainder of the class in 2023, and we expect that is one thing that continues into 2024.”

Preliminary information from The Beverage Data Group, the information accomplice of Cheers journal, reveals tequila at between 5% to 7% development final 12 months. Class leaders Cuervo and Patron every shrunk round 2% — additional proof of leveling off.

Tequila Traits in 2024

Which is all to say that whereas the numbers might not leap off the charts anymore, tequila will stay a development driver this 12 months. So what can we count on from this class by way of tendencies? 

Premiumization has been the dominant story in tequila — and far of the alcohol business — for the previous decade. Whereas prospects will proceed reaching for top-shelf bottles, 

Moreno does see some pullback due to macro causes, coupled with a contact of tequila class overexpansion. “Economically, many shoppers really feel iffy or weary concerning the potential for a market crash in 2024,” Moreno explains. “I’ve seen that extra shoppers have been shopping for down. However rapidly, we have now all these further anejos, anejos and even reposados priced between $200 and $400. We’ve by no means seen these costs earlier than. I believe the shoppers are extra comfy with the $50 to $100 worth level.”

Rocker Sammy Hagar and chef Guy Fieri Rocker Sammy Hagar and chef Guy Fieri
Rock and Roll Corridor of Famer Sammy Hagar and chef Man Fieri launched Santo Spirits tequila in 2019.

Maybe the 2 largest tendencies in tequila at present are celebrity-launched manufacturers and “additive free” merchandise. Combining these two parts is Santo Tequila, from Sammy Hagar and Man Fieri.

“There could be a backlash to celeb tequila manufacturers,” says Dan Butkus, Santo president and CEO. “Some [celebrities] don’t even drink the tequila first and put out merchandise stuffed with components. We had thought of shying away from the celeb focus, however felt that our celebrities actually engaged with the model.”

It helps when the crew is Hagar, a pioneer of celeb alcohol manufacturers, and Fieri, who has launched a variety of profitable food and beverage manufacturers himself. Authenticity is the whole lot when tying a product to a public star. The story and high quality should match the celebrity.

For example: Santo, launched in 2019, focuses on additive free. The Tequila Regulatory Council, the class’s governing physique, permits 1% of any agave spirit to encompass components, with none discover on the bottle’s label. Many manufacturers that use 0% components now promote this truth prominently on packaging and advertising.

“You may have a better variety of individuals now searching for true tequila style,” Butkus explains. “Additive free will change into the dominant subcategory.”

It is a flip from some practices throughout earlier levels of the continued tequila growth.

“Once we had been having the agave scarcity issues, individuals had been sourcing youthful and youthful agave merchandise,” Butkus says. “The price of agave was additionally going up. As tequila was booming, extra manufacturers, particularly the bigger ones, had been compelled to make use of youthful agaves. That meant they’d to make use of plenty of components to beat underripe agaves and different flaws within the liquid.”

Additive-free tequila and mezcal additionally ties into the “more healthy for you” life-style presently transcending all meals and beverage classes. So says Enrique Cobos, beverage director for the Chicago-based restaurant Moe’s Cantina, which has two places within the metropolis.

“Individuals respect that mezcal is made organically and artisanally,” he says. “That’s why I really feel that additive free shall be a robust development. Personally, I discover myself getting increasingly more into merchandise which can be additive free and made in smaller batches. Extra individuals will quickly notice that additive free is the way in which to go.”

However, Cobos notes, “you may speak concerning the manufacturing course of all day, however in the long run, all of it comes right down to taste. You don’t should be an knowledgeable to understand one thing that tastes good.”

Cristalino unclear

Elsewhere on Moe’s backbar, Cobos sees cristalino tequilas — anejos filtered till fully clear — staying robust.

“An increasing number of manufacturers are stepping up with these merchandise,” he observes. “I don’t assume that’s going to cease.”

However Cobos factors out that some shoppers get pleasure from cristalinos as a result of they don’t know that a lot about tequila. “Filtering a product makes it simpler to drink. Add in a elaborate bottle, and folks fall for it. It doesn’t imply that cristalino is for everybody, however the extra traditionalist tequila and mezcal drinkers, the aficionados, they don’t like cristalino.

interior of Moe's Cantina in Chicagointerior of Moe's Cantina in Chicago
Moe’s Cantina, with two places in Chicago, sees cristalino tequilas staying robust.

“Typically with cristalino, I believe they’re attempting to create a class that’s not there,” he provides.

Whereas Moe’s does promote a celeb tequila flight (George Clooney’s Casamigos Blanco, Kendal Jenner’s 818 Reposado and Kevin Hart’s Gran Coramino Añejo for $50), Cobos affords a broad caveat for these sorts of manufacturers.

“Simply because you are able to do it doesn’t imply it’s going to work,” Cobos says. “There’s some extent the place individuals have had sufficient. They may ask for extra high quality for his or her cash.”

Cobos believes that tequila bars will stay in style.

“Tequila is nice, as a result of you may construct a enterprise round it,” he says. Generally, there’s not an excessive amount of change happening in tequila. class. “That’s why you’ve got so many competing manufacturers attempting to come back out with one thing new nowadays.”

Nevertheless it’s key to not have too many manufacturers on the backbar, Cobos provides. “You need to hold it sincere. I like to recommend having 30 manufacturers and coaching your workers in order that they’ll actually speak about all of them.”

Along with cristalino, there have been a couple of current improvements within the tequila class. 

“Ending tequila in barrels that different merchandise have been aged in — comparable to port and even bourbon — continues to develop in reputation,” says Poelma of Southern Glazer’s. “We expect we’ll proceed to see extra innovation on this space from tequila manufacturers in 2024.”

“We’re additionally seeing tequila proceed to develop on-premise, with cocktail choices that stretch past the standard Margarita,” Poelma provides. “Together with mixologists together with tequila in additional drink menu choices, we’re even beginning to see accounts promoting the Glowing Margarita.”

Over the last couple of years, “we’ve seen shoppers change into extra within the other ways tequila can be utilized, and we don’t count on that to vary in 2024.”

Agave Scarcity Over?

Even earlier than sustainable, pure, eco-conscious alcohol merchandise turned stylish, a standard speaking level in tequila was the danger of an agave scarcity. In any case, because the class skilled exponential development, may farmers sustain with crops that take seven to 10 years to achieve maturity?

Zachary Poelma, Southern Glazer's Wine & Spirits SVP Supplier Strategy & Insights.Zachary Poelma, Southern Glazer's Wine & Spirits SVP Supplier Strategy & Insights.
“We’re seeing tequila proceed to develop on-premise, with cocktails that stretch past the standard Margarita.”
– Zachary Poelma,
Southern Glazer’s Wine & Spirits

Moreno thinks this tide has turned. “We went by an agave scarcity not way back, however proper now, we’re on the up and up,” he says. “There was such a rush from the farmers to plant as a lot as potential.” 

The agave market is much like Wall Avenue, Moreno says: There are ups and downs, however it ranges out. “I’ve very assured to say that we’re approaching a surplus now.

“We must always begin seeing extra of our favourite manufacturers quickly,” he provides. “If something, the glass scarcity is extra regarding for tequila. They’re nonetheless having points with that down in Mexico.”

Agreeing with Moreno is Poelma of Southern Glazer’s. “Whereas tequila has grown considerably in reputation, we aren’t involved about agave shortages at the moment,” he says. “The worth of agave has fallen by greater than 50% from the excessive in the course of the pandemic.” 

And as demand has slowed from the excessive double-digit development in 2021 and 2022, Poelma says, “we count on ample availability of agave for the following few years to produce present tendencies.”

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