Tequila’s remarkable ascent to becoming the world’s premier spirit is undeniable. Surpassing stalwarts like whiskey in both sales volumes and values in the US during 2022 and 2023, this surge is predominantly fueled by the ascendancy of its premium and above categories.
A closer look at the data reveals that the three premium and above grades—premium, high-end premium, and super-premium—command nearly 90% of sales volumes. Zooming in on the top two premium tiers, high-end and super, boasting 750ml bottles priced between $60-150 and $150 and above, respectively, underscores their dominance, constituting over 50% of market volumes. Even more, super-premium alone is set to hold 40% of volume and 55% of value within the next two years.
But what lies at the core of this market’s premiumization? In this article, we delve into the driving forces behind tequila’s explosive premiumization, with a special focus on celebrity investments.
Celebrity Brands You Need to Try:
George Clooney – Casamigos
Casamigos Tequila, founded in 2013 by George Clooney, Rande Gerber, and Mike Meldman, offers Blanco, Reposado, and Añejo varieties, crafted from 100% Blue Weber agave. Acquired by Diageo for $1 billion in 2017, it remains a top player in the tequila market, celebrated for its smooth taste and celebrity backing.
Kendall Jenner – 818
Launched by model and entrepreneur Kendall Jenner in 2021, 818 Tequila draws inspiration from her Californian roots and hometown area code. Crafted in Jalisco, Mexico, using traditional methods and 100% Blue Weber agave, 818 Tequila offers Blanco, Reposado, and Añejo varieties. Despite its recent entry, it has swiftly gained attention and acclaim, establishing itself as a rising star in the tequila industry.
Michael Jordan – Cincoro
Cincoro Tequila, co-founded by basketball legend Michael Jordan and four other NBA team owners, delivers an ultra-premium experience with its Blanco, Reposado, and Añejo expressions. Crafted from 100% Weber Blue agave grown in Jalisco, Mexico, Cincoro emphasizes quality and authenticity in its production process. Despite being relatively new to the market, it has garnered attention for its exceptional taste and celebrity backing, positioning itself as a top contender in the luxury tequila category.
The Impact of Celebrity Brands on the Tequila Market
Premiumization of Tequila
Tequila’s journey towards becoming a symbol of luxury and sophistication mirrors the post-prohibition era of Scotch whisky in the United States, when brands such as Dewar’s and Johnnie Walker became household names. Celebrities and media have played a pivotal role in portraying tequila as a drink synonymous with status and elegance. Through its inclusion in movies, television shows, and advertisements, tequila has acquired an aspirational allure, enticing consumers to gravitate towards premium brands.
A more recent example is seen with Japanese whisky, which, despite its initial domestic appeal, has risen to global prominence, garnering even greater esteem among enthusiasts than Scotch. This surge can be directly linked to Bill Murray’s iconic ‘It’s Hibiki time’ scene in the 2003 movie “Lost in Translation,” catalyzing Japanese whisky’s unprecedented yearly sales growth from $20 million in the early 2000s to over $3.86 billion in 2022, and establishing it as a premium spirit on the international stage.
In 2022, agave-based spirits, predominantly super-premium tequilas, accounted for nearly one in every three bottles of luxury spirits in the US. This marks a significant shift from a decade ago when the tequila category represented less than 10% of the US status spirit market by volume.
The majority of celebrity-backed brands launched in the past decade, such as George Clooney’s Casamigos, Michael Jordan’s Cincoro, and Kendall Jenner’s 818, are categorized as premium-and-above grade. Notably, some releases fall into the super-premium category, exemplified by Michael Jordan’s Cincoro Añejo tequila retailing at over $169.00, showcasing the irresistible allure of celebrity-endorsed brands.
Growth in Tequila Consumption and Global Awareness
The surge in tequila’s popularity is not solely driven by premiumization but also by a growing global awareness of the spirit. In today’s digital era, celebrities and influencers play a significant role in shaping consumer preferences and market trends. Tequila’s appeal spans across age groups, with notable consumption rates among 25-34 year olds (24.2%), 35-44 year olds (24.6%), 45-54+ year olds (17.3%), and 55-64 year olds (15.3%).
Moreover, gender demographics exhibit a balanced distribution, with women comprising 52% of tequila consumers and men 48%, distinguishing it from spirits like whiskey traditionally associated with a predominantly male audience.
In the first half of 2023, agave witnessed growth in 15 of the world’s top 20 beverage alcohol markets, with 11 of them experiencing double-digit volume growth. Anticipated growth rates for tequila are particularly high outside the US in the next decade, with key markets such as Canada, the UK, Spain, and Australia projected to grow at double-digit compound annual growth rates (CAGRs).
These positive trends can be attributed to various factors, including the influential role of celebrity-backed investments and their appeal to consumers across all demographics.