Findings:
Tequila’s Popularity is Booming: Once seen as a spirit for shots, tequila is now a complex, premium drink enjoyed in cocktails, especially Margaritas. It is the second-largest spirit in the US and is gaining popularity in the UK, particularly in cocktail bars like Hacha, with increasing presence in the grocery market.
Sales Growth: Off-trade tequila sales in the UK have grown by 15% to £46.1m, but they still represent a small fraction of the £5.6bn spirits market, with gin and vodka leading. There’s significant room for growth if tequila can replicate its US success in the UK.
Price and Perception Barriers: Tequila remains more expensive than other spirits, with an average price of £34 per liter compared to gin and vodka. Price sensitivity may limit consumer uptake, but premiumization and quality perception are improving.
Retailer Engagement: Retailers like Waitrose have started to expand their tequila offerings, though it still represents only 5.3% of spirits on their shelves. The time lag in getting new products onto shelves is a barrier to faster growth.
Key Takeaway:
Tequila’s premiumization, growing appeal in the cocktail scene, and increasing presence in supermarkets signal strong growth potential. However, the category still faces challenges in price perception and consumer education.
Trend:
Tequila is experiencing a premium-driven resurgence, led by cocktail culture and the involvement of celebrity-backed brands. The trend reflects a shift from tequila being perceived as a party shot to a complex, sippable spirit.
Consumer Motivation:
Consumers are motivated by the appeal of tequila in high-quality cocktails like Margaritas and Palomas. The association with celebrity-backed brands also enhances its appeal as a premium spirit. Health-conscious consumers are increasingly opting for tequila due to its "clean" image compared to other spirits.
What is Driving the Trend:
On-Trade Cocktail Popularity: Tequila’s versatility in cocktails has led to increased demand in bars and restaurants, which is slowly translating to off-trade grocery sales.
Celebrity Endorsements: Brands like George Clooney’s Casamigos and Dwayne ‘The Rock’ Johnson’s Teremana are helping raise tequila’s profile.
Rising Popularity of Mexican Cuisine: The growing popularity of Mexican food has boosted tequila consumption, especially in drinks like Margaritas.
Who the Article Refers to:
Deano Moncrieffe, tequila and mezcal expert and owner of Hacha, and Tom Bishop, co-founder of El Rayo, are key voices discussing tequila’s rise.
Major Tequila Brands: Casamigos, Don Julio, Patrón, El Rayo, Olmeca Altos, and celebrity-backed brands like Teremana.
Description of Consumers and Products/Services:
Consumers of tequila are evolving. Once viewed as a party drink, it is now appreciated as a sophisticated spirit for cocktails and sipping. Products include premium tequilas (e.g., Casamigos, Teremana) and ready-to-drink (RTD) options like margaritas and Palomas, offering convenience and lower entry points for new drinkers.
Conclusions:
Tequila is on the rise, but it has yet to reach mainstream popularity in UK retail. The spirit’s high price point and the time it takes for retailers to adjust to the trend present challenges. However, the involvement of celebrity brands, growing demand for cocktails, and tequila's versatility mean the category is well-positioned for growth.
Implications for Brands:
Innovate with RTD Products: Ready-to-drink tequila-based cocktails provide an accessible entry point for consumers.
Educate Consumers: Brands must work to shift consumer perception of tequila as a premium product through education on its complex flavors and high-quality production methods.
Leverage Celebrity Influence: Celebrity-backed brands can help attract new consumers, but they must emphasize authenticity and quality to avoid being seen as gimmicky.
Implications for Society:
Tequila’s rise reflects broader shifts in consumer preferences for premium, high-quality alcoholic beverages and healthier options. This shift may continue to influence other categories as consumers look for clean, authentic products.
Implications for Consumers:
As tequila’s profile rises, consumers will have access to more premium options, including RTDs and cocktail kits, making tequila more approachable and versatile. Price perception and quality assurance will be key in driving consumer interest.
Implications for the Future:
Tequila’s potential for growth in the grocery market is significant, particularly if it can replicate its US success. The trend toward premiumization, driven by consumer interest in high-quality cocktails, will likely continue.
Consumer Trend:
Tequila is becoming a favored spirit for cocktail enthusiasts, with growing interest in premium, authentic, and celebrity-endorsed brands.
Consumer Sub-Trend:
Ready-to-drink (RTD) tequila cocktails are gaining traction as consumers look for convenient ways to enjoy tequila at home.
Big Social Trend:
The broader trend toward premiumization in spirits and the increasing consumer preference for high-quality, artisanal products is driving tequila’s rise.
Local Trend:
In the UK, tequila is still in its growth phase, particularly in retail. The off-trade is catching up with on-trade tequila demand, and premium offerings are starting to appear on supermarket shelves.
Worldwide Social Trend:
Globally, tequila is experiencing a renaissance, with the US leading the charge. The spirit’s shift from low-grade shots to a premium, complex drink is mirrored by the global rise in artisanal, high-quality products across all categories.
Name of the Big Trend Implied by the Article:
“Tequila Renaissance” – Tequila’s transition from a party shot to a premium, sophisticated spirit with growing popularity in cocktails.
Name of Big Social Trend Implied by the Article:
“Premiumization of Spirits” – The global shift toward premium, high-quality spirits, driven by consumer interest in authentic, artisanal products and celebrity endorsements.
Social Drive:
The desire for unique, high-quality experiences in drinking culture, combined with the influence of celebrities and the rise of Mexican cuisine, is fueling tequila’s popularity.
Strategy Recommendations for Companies to Follow in 2025:
Expand Ready-to-Drink Offerings: RTD tequila-based cocktails provide an entry point for new consumers and can drive at-home consumption.
Leverage Celebrity Partnerships: Partner with celebrities to boost brand awareness but ensure authenticity to avoid consumer fatigue.
Educate and Premiumize: Focus marketing on educating consumers about tequila’s complex production and premium qualities to justify higher price points.
Invest in On-Trade Relationships: Build partnerships with bars and restaurants to elevate tequila’s presence on cocktail menus, which can help boost off-trade sales.
Develop Price Tiers: Create a range of products at different price points, from entry-level to super-premium, to capture a broader audience.
Comments