An employee pours tequila into the popular frozen drink Mountain Dew Baja Blast at the new Taco Bell Cantina in Brooklyn, Massachusetts.
John Tlumacki Boston Globe Getty Images
Tequila may soon overtake vodka as America’s favorite alcohol, fueled by consumers’ desire for expensive bottles of agave-based spirits.
Tequila and mezcal were the second fastest growing spirits category in 2021, following only pre-blended cocktails. Agave-based spirits saw sales up 30.1 percent from a year earlier to $ 5.2 billion, according to the U.S. Distilled Spirits Council.
It was also the second largest revenue category after vodka № 1, which is the best-selling alcohol in the United States since the 1970s. With revenue of $ 7.3 billion, vodka still sells about $ 2 billion more annually than tequila and mezcal, but agave-based spirits may be ahead of them in just a few years.
For more evidence of the trend, look no further than casinos. Julian Cox, the famous bartender and CEO of beverages and corporate mixologist for MGM Resorts International, said that the total sales of vodka and tequila in the hospitable giant are increasing.
“No one could believe it,” he said.
Using volume as a measure, vodka still remains king. According to DISCUS, alcohol was sold in 78.1 million cans in 2021, more than twice the volume of the next category: pre-mixed cocktails. Tequila and mezcal are in fourth place with 26.8 million boxes.
High-end tequilas are helping to grow the category, according to Christine Locaschio, head of public policy at DISCUS.
“It’s not just for margaritas,” LoCashio told the trade group’s annual economic briefing on Thursday. “There are so many high-end tequilas that you can drink and enjoy like many other high-end products, such as whiskey and cognac, bourbon and high-quality rum.
Diageo CEO Ivan Menezes reiterated this opinion in a recent call about the company’s profits. The distiller has two luxury tequila brands: Don Julio and Casamigos.
“The attractiveness of the category in demographic groups is significant,” he said. “He passed. Multicultural growth is very strong. It crosses age segments, crosses gender, crosses parts of the day, occasion and nature of drinks. It’s not just shots and daisies, like many years ago. “
The Crown Royal owner predicts that tequila sales will grow faster than the wider alcohol industry over the next five to 10 years. In the first half of its fiscal year 2022, tequila sales increased by 56% compared to the previous period.
Tequila also helps the spirits industry steal customers from beer. Tony Abu Ghanim, a famous mixologist and author of Vodka Distilled, created the beverage programs for T-Mobile Arena and Allegiant Stadium, both in Las Vegas. The menu of the sports facilities includes margaritas prepared with fresh ingredients and 100% agave tequila.
“A lot of people think when they go to an arena or a stadium, ‘I’m just going to drink beer,’ and our feeling was that if we put a better margarita in their hands, they’ll buy margaritas. And this has been proven, “Abu Ganim said.
LoCascio of DISCUS also acknowledged that the presentation of celebrities helped draw attention to the category.
Many celebrities have released their own brands of tequila and mezcal, including actor and former professional wrestler Dwayne Johnson and model Kendall Jenner last year. In addition to the agave jump, they hope to emulate the success of George Clooney’s Casamigos tequila, which was sold to Diageo for $ 1 billion in 2017. Last year, Constellation Brands invested in Breaking Bad colleagues Aaron Paul and Dos Hombres mezcal by Brian Cranston for undisclosed amount.
The growth potential of Mezcal
About 98% of $ 5.2 billion in sales of $ 5.2 billion agave-based spirits are made from tequila, which is produced exclusively from the blue agave plant. Mezcal is a much broader label applicable to any spirit drink made with dozens of types of agave.
“[Mezcal] it’s growing, but it’s still a very small part of that broader category, “LoCascio said.
MGM Coke is optimistic about the future of mezcal, citing the wide variety of flavors and taste profiles. “Mescal is like an aroma bomb,” he said. “For making cocktails, if you use it in the right environment, you have a lot of taste.”
Julian Cox
Source: MGM Resorts International
After consumers try cocktails made with mezcal, the next step for the promoters of the category is to introduce them to spirits made with all kinds of agave.
Abu Ghanim said younger consumers were leading, eager to expand their horizons. There is also a geographical element in its growth. Cox, who was previously based in Los Angeles but now works in Las Vegas, said most Sin City visitors remain largely uninformed about the mezcal.
Mezcal is seen as authentic for its roots and tradition, attractive to purists like Cox and Abu Ghanim. Mexico has introduced regulations on what distillers may call mezcal, limiting production to certain states in the country. (Non-certified products may be marketed in the United States as “agave alcohol.”)
“They can’t do a lot of mescal, and that’s the beauty and the art of that,” Abu Ganim said.