In focus: Tequila and mezcal trends
Tequila and mezcal are increasingly popular, and their success has been driven by celebrity endorsements and high-end expressions. With an ongoing agave shortage, Phoebe French finds out if future growth is sustainable.
The appetite for agave shows no sign of diminishing. With the likes of Hollywood heartthrob George Clooney, pop star Justin Timberlake, singer Rita Ora and Sex and the City’s Chris Noth putting their names behind Tequila and mezcal, the influence of celebrities in the category is marked.
And there’s more to their involvement than just superficial marketing. Following the sale of Clooney’s Casamigos to Diageo in 2017, it was reported that the actor pocketed a cool US$173 million (£136m) from the deal in the 12 months afterwards. This made him the highest-paid actor of 2018, despite not having appeared in a single film, proving that sometimes, its Tequila, not Hollywood, that calls the shots.
Tequila, however, is not short of admirers outside the ranks of the rich and famous. According to data from the IWSR, in the past three years, it has been the second-fastest growing spirits category, rising at a rate of 9% year-on-year, just behind gin at 12%. Tequila exports are also on the rise, posting record levels in 2018 for the ninth year in a row, according to the National Tequila Regulatory Chamber (CNIT).
Tequila producers are also upping production volumes to meet this demand. According to CNIT figures, 309.1 million litres of Tequila were produced in 2018, up by 13.9% on 2017, and the second-highest volume ever recorded.
A key characteristic and well-established trend in the Tequila industry is that of premiumisation. While it is still ordered in shot form, accompanied by a wedge of lime, Tequila has taken on a new mantle as a spirit to be sipped and savoured rather than consumed in record time.
John Tichenor, global director of Tequilas for Brown-Forman, explains: “Global Tequila trends have continued to perform extremely well, driven by the premium-plus and luxury segments. What was once led by the popular price category is now led by super-premium and luxury priced brands.”
Tom Bishop, co-founder of the newly launched El Rayo Tequila, which uses a blend of highland and lowland agave to make the spirit, believes premiumisation has become so widely adopted that it can be called “a behavioural change”.
“This is obvious in the Tequila category, as consumers look to shun mixto Tequila (and the associated lime and salt) and turn their attention to the premium end of the spectrum,” he says.
Nick Gillett, managing director of spirits importer and distributor Mangrove UK, adds: “100%-agave Tequila is now the starting entry point, reflecting the significant growth in demand for quality Tequila. Consumers are taking the category far more seriously, and perceptions are changing as they realise that it is a rewarding drink.”
With experimentation on the rise, one of the ways in which brands in this premium segment have highlighted their credentials is the release of single estate or ‘terroir-driven’ expressions. Brands such as Ocho, Pernod Ricard’s Olmeca, and Brown-Forman’s Casa Herradura place the emphasis squarely on the region, and in some cases the estate in which the agave was grown.
“We think terroir will play a crucial role, and take pride in the fact that we are the first in UK to be offering a Tequila that is a blend of both highland and lowland agave,” says Jack Vereker, co-founder of El Rayo. “The message needs to continue to be pushed to consumers that Tequila is a natural product and that growing conditions are crucial to the overall flavour and taste.”
Producers are also testing the waters by using different cask finishes and ageing techniques to created added variety.
Last year, Diageo, for example, released a Reposado Double Cask variant of its Don Julio Tequila in the US. Made like the original Reposoda expression, it was then finished for 30 days in casks used to make Buchanan’s Blended Scotch whisky. The limited-edition expression was the brand’s first launch in seven years.
Don Julio is also one of the brands responsible for another category that is gaining traction. Cristalino Tequila, an aged variant that has undergone charcoal filtration to remove the colour and some of the more assertive wood flavours, has grown massively since the first examples were launched a few years ago, with Don Julio 70 unveiled in 2011.
Tichenor adds: “Cristalino continues to be the biggest trend driving Mexico’s category growth, with premium brand introductions bringing new consumers into the category that may have previously rejected the drink. As consumers experience the unique Cristalino taste profile a huge opportunity exists to accelerate the category beyond Mexico.”
As well as cask finishes, using different types of oak, and experimenting with toast and char levels are among other methods being employed.
For Tichenor, the range of effects that can be achieved, from light agave expressions to richer, aged Tequila “rivals any aged whiskey”.
There’s no shortage of famous faces taking on Tequila and mezcal. Ambhar Tequila (Chris Noth), Casamigos (George Clooney), Santo Mezquila (Adam Levine of Maroon 5 and Sammy Hagar), Thunderstruck Tequila (AC/DC), Wild Shot Mezcal (country singer Toby Keith), Sauza 901 (Justin Timberlake, DeLeón (P Diddy) and Casa Noble (Carlos Santana) are among a long list of celebrity-backed brands. But how does the industry feel about such endorsements?
Gillett of Mangrove says: “I don’t see a downside to the current celebrity interest in the category. For starters, it gives a ringing endorsement that Tequila tastes great, and if consumers decide to try Tequila because a celebrity has invested in a brand, then this is simply recruiting more people to the category, which can only be a good thing.”
Tichenor of Brown-Forman similarly believes high-profile involvement in brands has attracted new faces to the category, but adds that Tequila has room to grow with or without celebrity involvement. “Tequila isn’t the first spirits category to have celebrity brand ownership, but it appears to have the most celebrities trying to gain their fair share of the growing category,” he says.
“It has helped accelerate Tequila’s mainstream appeal and welcomed new consumers to the category at the super-premium and luxury segments. With only a 3% share of the global spirits market, however, Tequila has a huge opportunity for growth, with or without celebrity-backed investments.”
Raffaele Berardi, the CEO of Fraternity Spirits, which owns Tequila Corralejo, believes high-profile figures will help the spirit to vault a major hurdle on the horizon. “Celebrity participation is helping the category to get the reputation and premium image it needs to survive the fluctuations in the price of agave in the future,” he says.