Patrón was the brand that created the super-premium tequila category and Wilson says this segment is not only growing in the US, but it’s becoming the standard bearer in many other markets as well. The reason? “It’s simple – a high quality 100% agave tequila such as Patrón is a different, much better spirit than a 51% agave tequila.”
In the US tequila is up 5% in volume and 4% in revenue with the growth concentrated in super-premium (DISCUS 2014).
The purchases of Don Julio and Avion Tequilas last year by Diageo and Pernod respectively show intent and a confidence that growth is more than a fleeting trend.
Diageo’s Tomlin says: “Over the past three years super-premium-plus has accounted for 43% of tequila dollar sales, according to Nielsen.” This is due, Tomlin says, to consumers drinking better quality tequila and becoming more “tequila literate”.
China
Since the lifting of the ban on very high quality tequila in China in 2013, exporters have been falling over themselves to tap into the luxury market and make Asian consumers more tequila literature. So much so that the National Tequila Industry Association recently stated that China looks set to replace Mexico as the second largest market. This followed president Peña Nieto’s predictions that exports would swell to 10 million litres by 2019.
For Patrón – already available in 100 markets – China is very much a focus. Wilson says Chinese consumers have embraced luxury spirits and appreciate a high quality product. “Our approach in China, just as it is in the rest of the world, is on-trade and consumer education – especially in a market such as China, which only recently opened to ultra-premium tequila brands. We target high-end bars, restaurants, hotels and retail outlets in major cities, where consumers expect to find the best spirits.”
For Diageo in Asia, by its own admission, tequila is a small category. Despite this, the company says the total category (specific to Asia) is growing, particularly at the super/ultra-premium with 2015 growth up 8.9% on 2014.
Over at Beam Suntory, Sauza is readying itself for its “first foray into China”. In May this year, Sauza rolled out the largest global rebranding in its history to help drive long-term growth in existing North American markets, in addition to expansion efforts in new, emerging tequila markets such as Japan, Brazil and Russia and China.
Flavour
They are perhaps not in the luxury Asian market, but flavours are an undeniably good way of enticing consumers into a category they might otherwise avoid – just look at vodka, gin and whisky. Tequila brands are currently experimenting with flavours such as chilli to add heat to the already throat-burning beverage and spiced honey to sweeten the deal.
Claire Richards, senior director of tequilas at Beam Suntory, says tequila’s unique two-format approach of shot and Margaritas has shaped Sauza’s “innovation strategy with flavours”.
Beam Suntory has recently introduced Hornitos Lime shot to “elevate the salt and tequila and lime ritual”. Its latest innovation is Spiced Honey – a 100% blue agave Hornito Plata infused with natural honey flavour and a ‘special spice blend’ for sweet and heat. Sticking with the hot vibe, Sauza tequila introduced Cucumber Chili tequila in June. The first flavoured offering is designed for a slightly spicy and refreshing twist to the Margarita.
