Marketing

Tequila market ticking away

With all the noise over the gin boom and whiskey booms, it's perhaps easy to overlook the market here for Tequila - but you should keep a weather-eye out for the rise of the Tequila market which is likely to result from the ongoing changing profile of Tequila brand ownership. So what Tequilas should you stock for the discerning customer? We review the Tequila market in this month's Industry Report.

In 2017 Tequila volumes grew 5.1% to 33.6 million (nine litre) cases according to market research provider Euromonitor International. Euromonitor goes on to predict further growth of 4.5% to 35.1 million cases in 2018.

While the vast bulk of Tequila – 85% of it – is downed in the US and Mexico, the potential for a global expansion in sales remains in place.

Over the five years from 2017 to 2021, IWSR, widely seen as the most authoritative data source on the beverage alcohol market, predicts that global volumes of Tequila will see an increase of some 5.8 million nine-litre cases.

If a company like Diageo has expanded its potential to service the tequila market with a doubling of its bottling capacity to around five million cases a year down Mexico way, it must be onto something.

After all, just three years ago it gave Bushmills Irish Whiskey up to Casa Cuervo in return for full control of the Tequila Don Julio brand (so long as Cuervo pays some $408 million for the Bushmills brand).

While Jose Cuervo Tequila remains the best-selling Tequila in the world this move secured Diageo’s presence in the “growing super and ultra-premium segments of the Tequila category,” according to former Diageo Chief Executive Ivan Menzies.

Elsewhere, Bacardí has expanded its wings taking ownership of Patron. This consciousness of Premiumisation in the Tequila sector and resultant moves towards Premiumisation by major international companies is beginning to gain momentum outside the US thanks to Tequila-producers’ emulating the whiskey-makers in innovating and ‘crafting’ their product and educating the masses about Tequila, not to mention enthusiastic and open-minded bar staff.

Today’s more informed consumers are sipping rather than ‘throwing back’ a whole new range of Tequilas.

Indeed, consumers are beginning to get the category, showing a preference for those made with 100% Agave cactus plants rather than the more commonly-downed Tequilas made from mixed sugars.

This focus on the more ‘artisanal’ Tequilas is helping the category ride on the coat-tails of the demand for craft in spirits generally.

But Bacardí’s purchase of what is perhaps the most premium Tequila brand of them all on the market in the last few years in a deal worth $5.1 billion didn’t surprise everyone.

“There is little surprise in Bacardi’s acquisition of Patron due to its existing minority stake in the company and the fact that all its major rivals have a super-premium tequila brand,” observed Jeremy Cunnington, Euromonitror International’s Project Manager for Drinks, Tobacco and Packaging, “The price, while seemingly high too is not a surprise, with the dearth of high quality brands available making it a sellers’ market.

“At least this one has the advantage of buying an established brand and with strong revenues rather than potential as many of the other recent acquisitions such as Diageo’s one of Casamigos”.

Euromonitor International data show that Bacardi ranks 11th in the global tequila market with a 1.7% share in 2016.

 

Tequila in Ireland

Here in Ireland, Tequila is beginning to make its presence felt.

Euromonitor International figures estimate that Tequila consumption will show slight growth in 2018, going from 11,207 nine litre cases to 11,233 cases.

One new bar making its living on selling Tequila here is Tequila Jack’s Mexican Restaurant & Tequila Bar at Lapps Quay on the boardwalk overlooking the River Lee in Cork.

Serving a variety of classic Mexican dishes, it boasts over 60 varieties of Tequila and it’s cousin, Mezcal (which is not restricted to the Blue Agave variety of cactus).

“The owners went on a trip to Boston a while back to visit a friend of theirs that has a few Mexican restaurants in the city,” explains Tequila Jack’s Chris Crowley, “They fell in love with the idea of a Mexican Bar & Restaurant and saw a market for it in Cork. I had worked for them a few years ago and since I was moving back from Dublin they decided to take me on as the Manager and set up the drinks program centred around Tequila.”

Perhaps not surprisingly, Tequila Jack’s Margaritas have become very popular since it opened a year ago this month.

“Although we have a huge range of Tequila & Mezcal in our bar, the Margarita seems to be the best way to introduce our customers to drinking Tequila,” says Chris, “We made a huge effort to have the best Margarita in town, from getting 100% Agave Tequila to using Agave nectar instead of sugar and always using fresh Lime juice. We knew when we opened that we couldn’t cut corners if we wanted to be a great Tequila Bar.”

The bar has plenty of sipping options for discerning drinkers of its Tequilas but Chris believes that Tequila will always be associated with shooters.

“Most spirit categories get pigeon-holed into different occasions,” he says, “For instance Rum would be widely used in cocktails, Gin is predominantly drunk with tonic etc… Tequila is no different but I think the more we expose Tequila to consumers, the more they will appreciate the different ways to enjoy it.”

Chris reckons that Tequila will grow as a cocktail spirit over the next five years.

“The demand for premium Tequila has already begun around Europe and it’s only natural that we follow the trend,” he explains “Our Tequila program is centred around using only the best 100% Agave Tequila. I think Tequila will grow into the predominant cocktail spirit and hopefully over time be considered a sipping spirit for people to enjoy neat or over ice.”

 

 

 

Jose Cuervo Tradicional Silver – Paloma recipe

The legacy of Tequila dates back to 1795 and it’s all down to one man, Jose Antonito de Cuervo, the first person to be granted a licence to produce and distribute Tequila. Fast forward to 2018 and Jose Cuervo is the number one tequila in the world so it’s only right that the portfolio of Jose Cuervo Especial, Jose Cuervo Tradicional and Reserva de la Familia is celebrated worldwide.

Jose Cuervo Tradicional is made using 100% Agave and is chill-rested after distillation making it incredibly smooth to drink. Jose Cuervo Tradicional Silver uses methods originated by the Cuervo family over 200 years ago. By staying true to its method of Tequila production, Tradicional has earned itself a number of notable awards for its quality and taste and is perfect in any Tequila-based cocktail.

One of the most popular cocktails in the homeland of Tequila is the Paloma.

Recipe

35.5ml Jose Cuervo Tradicional Silver
35.5ml Grapefruit juice

35.5ml soda water
Wedge of Lime to serve

Sugar to rim the glass – optional

Method

  • In a sugar-rimmed collins glass, combine Cuervo, Grapefruit juice and Soda Water over ice
  • Garnish with a Lime.

Tradicional Silver can also be used to create the perfect Margarita be it classic, frozen or a Tommy’s Margarita which includes a little Agave syrup to sweeten up the Lime juice.

 

 

 

 

 

Casa Herradura – home of El Jimador & Herradura Tequila

Founded in 1870 in the valley of Amatitan Jalisco at the foothill of Tequila Mountain in the heart of the Tequila region, Herradura means horseshoe in Spanish.

All Herradura Tequila is hand-harvested, hand-crafted and estate-bottled.

Herradura is one of the leading brands in the ultra-premium Tequila category worldwide, using only 100% Blue Weber Agave.

Reposado & Extra Anejo have won 15 Double Gold medals since 2000 at the San Francisco World Spirits Competition.

 

Herradura Blanco

Herradura Blanco has a slightly sweet taste with subtle overtones of fruit and cooked Agave.

 

Herradura Reposado

Reposado means “rested”. It’s aged for 11 months (nine more than the category standards), which gives this Tequila its deep colour.

 

Herradura Anejo

Aged for two years, twice as much as suggested by the category standards, this exceptionally smooth Tequila is a pleasure to sip and savour straight.

 

El Jimador Blanco

El Jimador Blanco is a young, fresh and natural Tequila. Made from 100% Blue Agave, this sparklingly clear Tequila is double-distilled to remove impurities and immediately bottled to preserve its crisp, authentic character.

 

El Jimador Reposado

El Jimador Reposado is made with 100% mature Blue Agave, hand-crafted and aged for two months in American oak barrels.

 

 

 

 

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