An employee pours tequila into the popular Mountain Dew Baja Blast frozen drink at the new Taco Bell Cantina in Brookline, MA.
John Tlumacki | Boston Globe | beautiful pictures
Tequila could soon overtake vodka as America’s favorite, fueled by consumer desire for expensive agave spirits.
Tequila and mezcal are the second fastest growing spirits in 2021, Only ready-made cocktails follow. Agave spirits saw sales increase 30.1% year-over-year to $5.2 billion, according to the Distilled Spirits Council of America.
It’s also the second-largest category by sales after #1 vodka, the best-selling liquor in the US since the 1970s. With $7.3 billion in sales, vodka still sells about $2 billion more. dollars per year compared with tequila and mezcal, but agave brandy will likely outpace it in just a few years.
For more proof of the trend, look no further than the casinos. Julian Cox, celebrity bartender and executive director of the beverage division and company for MGM Resorts Internationalsays total sales of vodka and tequila are running on par with the hotel giant.
“No one could believe it,” he said.
Using volume as a yardstick, vodka is still king. According to DISCUS, this wine sold 78.1 million cases in 2021, more than double the volume of the next category: ready-to-drink cocktails. Tequila and mezcal finished fourth with 26.8 million barrels.
According to Christine LoCascio, Director of Public Policy at DISCUS, premium tequilas are helping to drive industry growth.
“It’s not just for margarine,” LoCascio said at the trade group’s annual economic briefing on Thursday. “There are so many premium tequilas that you can sip and enjoy like many other premium products, like premium whiskeys and cognacs, premium bourbons and rums.”
Diageo CEO Ivan Menezes echoed that view during the company’s recent earnings call. The distillery owns two premium tequila brands: Don Julio and Casamigos.
“The appeal of the category across demographics is substantial,” he said. “It has crossed the line. The cross-cultural development is very powerful. It cuts across age segments, gender segments, cuts through the time of day, the holidays and the nature of the drink. It doesn’t cut it.” just the same junk food and margarine as it used to be “years ago.”
Owner Crown Royal forecasts that tequila sales will expand faster than the broader spirits industry over the next five to 10 years. In the first half of fiscal 2022, tequila sales grew 56% year-over-year.
Tequila is also helping the spirits industry steal customers from beer. Tony Abou-Ganim, famed mixologist and author of “Vodka Distilled,” has created beverage shows for T-Mobile Arena and Allegiant Stadium, both in Las Vegas. Sports venues have margaritas on the menu, made with fresh ingredients and 100% agave tequila.
“A lot of people think when they go to an arena or stadium, ‘I’m just going to have a beer,’ and our feeling is, if we put a better margarita in their hands, they’ll buy the margarita. And that has proven to be the case,” said Abou-Ganim.
DISCUS’s LoCascio also acknowledges that the launch of famous celebrities has helped draw attention to the category.
A host of celebrities have launched their own brands of tequila and mezcal, including actor, former professional wrestler Dwayne Johnson and model Kendall Jenner last year. In addition to jumping into the band agave, they also hope to rival the success of George Clooney’s Casamigos tequila, which was sold to Diageo for $1 billion in 2017. Last year, Constellation brand invested in “Breaking Bad” co-stars Aaron Paul and Bryan Cranston’s Dos Hombres mezcal for an undisclosed amount.
The development potential of Mezcal
About 98% of the $5.2 billion in sales of agave spirits are from tequila, which is made solely from green agave. Mezcal is a much broader brand that applies to any spirit created using dozens of varieties of agave.
“[Mezcal] growing, but it’s still a very small part of that broader category,” said LoCascio.
MGM’s Cox is optimistic about the future of mezcal, citing the wide range of flavors and flavor profiles. “Mezcal is like a flavor bomb,” he said. “For cocktails, if you use it in the right environment, you’ll have a lot of flavor.”
Julian Cox
Source: MGM Resorts International
Once consumers sample cocktails made with mezcal, the next step for catalog promoters is to introduce them to spirits made with all different types of agave.
Abou-Ganim says young consumers are leading the way, eager to broaden their horizons. There was a geographical element to its development. Cox, who was previously based in Los Angeles but now works in Las Vegas, said most visitors to Sin City are largely still unaware of the mezcal.
Mezcal is considered authentic to its roots and traditions, appealing to purists like Cox and Abou-Ganim. Mexico has introduced regulations on what distillers can call mezcal, restricting production to several states in the country. (Uncertified products may be sold in the United States labeled as “agave.”)
“They can’t make a lot of mezcal, and that’s the beauty and the art of it,” says Abou-Ganim.
