Covid-19 decimated large parts of the drinks industry in 2020, with total spirits volumes falling around 9% according to Euromonitor. However, the one major category that experienced an increase in sales was tequila, which saw significant 11% growth. With the widespread closure of the on-trade, it was assumed tequila would have been vulnerable to a dip given its traditional role as a shot in nightclubs, but the premium end of the category is responsible for the surprise performance.
According to IWSR, brands in the premium-plus price tiers are pushing the growth in tequila. Premium-plus grew by 16% in 2020 and is forecast at +8.1% CAGR 2021-2025. The research company also says that the lower price tier of the category actually declined 7.2% in 2020 and is only forecast to follow a 1.6% CAGR over the same period.
The US remains the largest market for premium tequila, with Europe gathering pace quickly, but one of the biggest trends influencing the rise is celebrity endorsement. George Clooney co-founded Casamigos in 2013 and just four years later Diageo swooped in with a $1bn bid for the brand. The product itself is premium and well made, but the intellectual property of Clooney is what added the real value.
A long list of celebrities have since got involved with the tequila industry, from Dwayne ‘The Rock’ Johnson to Pierce Brosnan. However, the levels of involvement of these celebrities vary widely, from appearing on the occasional photo shoot to releasing their own product. One of the more high-profile names to enter the frame is Kendall Jenner, who launched 818 tequila earlier this year. The 25-year-old broke the news to her 170 million followers on Instagram in February and it already has double the social media following of Patrón.
Mike Novy, president and chief operating officer of 818 tequila, says: “Many people look to celebrities as trendsetters and arbiters of style, and especially with the rise of social media, celebrities and their fans are closer than ever. In our case, Kendall isn’t just endorsing 818, she has built this company from the ground up, and has built an incredible team to help her create a delicious tequila that she is so excited to share with her fans.”
Major tequila brands spend millions a year on marketing strategies to get their product in front of their desired audience, however an A-list celebrity can simply generate huge exposure through their social media channels for absolutely nothing. Tequila’s fashionable status is now exposing it to a much wider group of consumers, which is simultaneously changing its perception as just a nightclub shot.
In an article from Robb Report, Kristopher DeSoto, founder and chief executive of Hiatus tequila, said he believes many of the celebrity endorsed brands of the past couple of years have little connection to Mexico or the culture of the category. “They know they can use their acting skills to convince enough folks that they somehow possess special insight into what is great tequila, it’s pretty ridiculous, but this is nothing new. Celebrities have been selling the public all sorts of products and services since the celebrity role was invented,” says DeSoto.
