Richards says consumers should anticipate additional innovation in flavour as the space evolves in the emerging category. Beverage Information Group’s Rogers explains why he thinks this space will evolve: “Added flavours mask the lower quality mixtos while keeping the retail price at affordable levels for the consumer.”
Mixto
Mixto need not quake in its sombrero as its premium and ultra-premium relation gains favour because it still has its place, Rogers says: “Mixtos will continue to be consumed through Margaritas but I also expect that they will be the core of flavoured offerings, which will keep them in demand.”
Patrón’s Wilson agrees: “There’s certainly still a place for mixto tequilas, but clearly the excitement and the growth in the category will continue to be around ultra-premium brands.”
Celebrity
Like it or not, the hip-hop and A-List presence in the category has shone a light on tequila and drawn consumers – who might otherwise have attributed horrid hangover memories to the tipple – to a different way of thinking.
Grindstaff at El Jimador says: “There is no question that celebrities such as Justin Timberlake, George Clooney and Sean Combs drive awareness and intrigue for the tequila category. In almost all cases, the brands that celebrities are creating or endorsing are priced above $40 per bottle in retail, which helps position the category as more authentic and premium.”
Analyst Rogers agrees: “Spirits are an affordable luxury and there’s not much more luxurious than the celebrity lifestyle. Clooney’s’ Casamigos is a great example, as is Timberlake’s 901 tequila, which earlier this year was purchased by Beam Suntory and transitioned into Sauza 901. Time will tell if Combs will make lightning strike twice with Deleón after his successful support of Ciroc.”
Diageo says it’s all about finding the right partner for the right brand. Consumers can see through the marketing and won’t buy into certain celebrities cracking open a bottle of spirits just because the billboard tells them they do.
According to Diageo’s Tomlin, you have to “leverage that partner correctly”. Marketing speak if ever you’ve heard it, but it makes sense. Putting its faith in Sean ‘Diddy’ Combs has paid dividends before and Tomlin thinks millennials will buy into the mogul for a second time.
He says: “Sean Combs is a living symbol of the lifestyle many millennials aspire to – one that values working hard and celebrating their successes.” The company says it isn’t looking to “leverage” a partner with Don Julio.
At the other end of the spectrum, Rande Gerber, Casamigos brand owner and business partner of George Clooney, says: “There are big companies that hire celebrities to promote their brands, but Casamigos is different.
“People appreciate the authenticity of our story. George, Mike Meldman and I own it, drink it, run the company and live the lifestyle. We are just three guys who know what we like and want to share it – one of us just happens to be a celebrity.
“The numerous awards and accolades Casamigos has received is a result of the spirit itself, not the people behind it.”While Patrón’s Wilson recognises celebrity association has probably helped some brands, he says: “We’ve never felt we need to pay a celebrity in order to sell Patrón – our tequila stands on its own merit.”
Travel Retail
Something that has helped tequila stand out on its own merit is travel retail. “It has contributed greatly to our growth and success, and our commitment to this vital sales channel is stronger today than ever in our company’s history,” Wilson says.
