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New Tequila Brands

Three brands of tequila that have emerged into the market in the past 12-18 months include Prospero by Rita Ora, Teremana by Dwayne Johnson, and Cincoro by Micheal Jordan. Details of each company have been provided below.

1. Próspero

  • Prospero is a tequila brand that was founded in April 2019 by Rita Ora. The company’s products are made by a Mexican master distiller, Stella Anguiano.
  • Marketing Mediums: The company uses social media platforms such as Facebook and Instagram. The company has not yet put out any digital, print, or television marketing.
  • Messaging: The brands messaging is centered around quality and feminine energy with a focus on women-run partnerships and founders as well as
  • Examples:
    • Prospero is the tequila that embodies the power of the female spirit.”
    • Designed by Stella Anguiano, one of Mexico’s premier female Master Distillers, Próspero is a hand-crafted spirit that offers an unparalleled flavor with a smooth, elegant, and perfectly balanced finish.”
NEW TEQUILA BRANDS, TEQUILA CONSUMPTION, TEQUILA BRAND PERCEPTIONS, TEQUILA INNOVATIONS & STRUGGLING TEQUILA BRANDS
  • Value Proposition: “Born of the lush, volcanic soil of the tequila valley, the majestic Blue Agave infuses the landscape from which Próspero Tequila is created.”
  • Target Audience: The product was originally released in two geographic markets; the United States and Ireland. Rita Ora has not made any public statements that relate to her target audience demographics.

2. Teremana Tequila

  • Teremana Tequila is a new brand of tequila that was launched in 2020 by Dwayne “The Rock” Johnson. The brand was originally called “Mana,” however, the name did not make it past licensing because it was too similar to other companies.
  • Marketing Mediums: The brand uses social media to market the brand on Facebook, Twitter, and Instagram. The company has not put out any print, digital, or television ads to date.
NEW TEQUILA BRANDS, TEQUILA CONSUMPTION, TEQUILA BRAND PERCEPTIONS, TEQUILA INNOVATIONS & STRUGGLING TEQUILA BRANDS
  • Messaging: The company is focused on the value of spirituality, family-owned values, and quality. They communicate this with their messaging by using creative wording and descriptive information to paint a clear picture of the brand to their consumers.
  • Examples:
    • The good things in life don’t come easy. Teremana is a result of incredible dedication and daily effort.”
    • Crafted in a small Mexican town, amidst the highest peaks of the Jalisco Highland mountains, every step of our tequila making process is meticulously done the right way at Distileria Teremana de Agave.”
  • Value Proposition: “From the earth to your glass, tequila is our passion. We take great care in every step of the process.”
  • Target Audience: Dwayne Johnson has centered the brand around targeting millennial markets with a focus on spirituality.

3. Cincoro

  • Cincoro is a tequila brand that was founded in September 2019 by Michael Jordan. The company has already won awards for their main offerings and for innovation in the industry.
  • Marketing Mediums: The company operates through email marketing and does not have any social media pages that promote their brand. The company did, however, introduce the brand through a 15 second online-only TV commercial titled ‘Ultra Smooth, Incredibly Delicious.
NEW TEQUILA BRANDS, TEQUILA CONSUMPTION, TEQUILA BRAND PERCEPTIONS, TEQUILA INNOVATIONS & STRUGGLING TEQUILA BRANDS
  • Messaging: The brand uses simple messaging to describe their offerings. Their main page includes one tagline and a one sentence description of the quality of the tequila. The messaging that they do have is centered around quality and notoriety.
  • Examples:
    • Born from a passion to create the finest tequila.”
    • Cincoro Tequilas are uniquely made with Weber blue agave from both the highland and lowland regions that have been cooked and distilled separately then artfully blended together into a single exceptional tequila.”
  • Value Proposition: “Cincoro tequila captures the essence of both terriors, uniquely using 100% Weber blue agave harvested from the highland and lowland appellations of Jalisco, Mexico.”
  • Target Audience: Geographically, the brand is targeting 12 markets; Arizona, California, Colorado, Connecticut, Florida, Illinois, Massachusetts, Nevada, New Jersey, New York, Washington D.C., and Wisconsin. The brand has not publicly disclosed the target audience demographic.

Tequila Consumption

Tequila sales continued to surge over the past year or so as more younger consumers shifted from beer and wine to low-calorie, premium, and authentic spirits and cocktails. Texas, Florida, and Southern California are key regions for tequila sales and see consumption not only during special occasions but year-round. Supported by an influx of premium brands, consumers now look for craft alternatives to cheap tequila offerings and prefer variants that “showcase agave flavors.”

General Statistics

  • Tequila sales in the US increased 36% in the period 2015-19 as Americans learned “to embrace the agave-based liquor as a sophisticated spirit to savor.” The category’s share on Drizly grew from 3.09% in 2016 to 6.52% in 2020.
  • “According to the IWSR, U.S. tequila sales grew by 8.3% in volume in 2019 alone.” In dollar terms, the category grew by 12.4% (or by $372 million) to $3.4 billion.
  • “Tequila has increased 1.54 percent in overall order share year-over-year, accounting for 6.65 percent of share post-Covid compared to 5.11 percent from March to July 2019.
  • Over that same period, whiskey has increased just .96 percent in share and vodka has decreased by 2.37 percent. Tequila now accounts for 12.7% of U.S. off-premise spirits sales, which is up from 9.1% for the 52 weeks prior to the pandemic.”

Demographic Shift

  • On Drizly, 50.91% of consumers purchasing tequila are male and 49.09% are female. The average age of the tequila consumer on Drizly is 37.8 years.
  • A lot of non-traditional consumers, primarily a younger demographic, have embraced agave craft cocktail over the past few years.
  • While the younger demographic is consuming lesser liquor, it is switching from beer and wine to spirits, which is boosting tequila sales. Within the spirits category, tequila is eating into vodka’s market share on Drizly.
  • “The spirits sector is benefiting from millennials who demand diverse and authentic experiences, and desire innovative and higher-end products.” Tequila brands such as JAJA specifically target millennials.
  • Silver or blanco tequila is the second-most popular category on Drizly among Gen Zers, third-most popular among millennials, and fourth most-popular among Gen Xers and Boomers.
  • While silver/blanco tequila had an 8.21% share across all genders on Drizly, for women alone, its share was 10% over the 12 months leading to May 2020.

Where is Tequila Being Consumed

  • Texas, Florida, and Southern California, regions with a larger Hispanic population, account for a lion’s share of tequila sales in the US. “However, while tequila’s sales growth may be slower in other U.S. regions, the overall category continues to climb.”
  • “Markets where tequila has an above-average share percentage include:”

Changes in Variants

  • Silver/ blanco replaced ajeno as the top variant within the tequila category five years ago. It has had the highest share within the category on Drizly for the past five years.
  • According to Mike Moreno of Moreno’s Liquor, “people are trending towards tequila that showcases agave flavors, and are not as interested in the profiles of the barrel finishing.” Though there will always be “people interested in the añejos and extra añejos”, he doesn’t see that “drastically slowing down. However, he sees “blancos trending with a massive uptick.”
  • “Drizly’s Top-Selling Tequila Styles, 2020 (through July 28) :”
    • Silver/blanco
    • Reposado
    • Anejo
    • Gold
    • Flavored

When is Tequila Being Consumed

  • Tequila was earlier associated with specific occasions such as “Cinco de Mayo or with dishes at Mexican restaurants;” however, it has transcended that and many consumers consider it their “go-to.”
  • The category has seen premiumization over the past few years; consumers now seek “100 percent Weber Blue Agave,” higher quality, and healthier tequilas priced at $30-plus.
  • The rise of the cocktail culture, “which has driven experimentation among consumers,” has been the primary factor driving sales of tequila. When the Covid pandemic started and bars and restaurants closed, “consumers brought their desire for premium cocktails home with them.”
  • Margarita (tequila-based), which has been America’s most-loved cocktail for several years, saw increased consumption during the pandemic because of its familiarity and versatility.
  • “RTD Margaritas rose by 190%, Tequila sales were up 114% and Margarita mixers increased by 123% in the off-trade during” the Cinco de Mayo (5 May) week.
  • “We see consumers trying different cocktails as well as tapping into agave-based spirits for a ‘healthier’ alternative to sugary mixed cocktails,” says Eric Dopkins, CEO of Milestone Brands, makers of Dulce Vida. “The skinny margaritas seem to be developing and gaining in both on-premise and off-premise consumption as consumers seek less carbs and calories.”

Changes in Brand Loyalty

  • An “influx of upper-tier brands entering the tequila category” has driven sales. Drizly saw a “4% share shift year-over-year (in 2020) to more premium tequilas, priced $30 to $59.99, from less expensive bottles, priced $1 to $29.99.”
  • According to Christina Choi, SVP of the tequila category at Diageo NA, “consumers are increasingly more interested in the ingredients and history behind their drinks, and are gravitating towards higher-end tequila as the availability of quality options continues to grow.” Authenticity matters and a lot of consumers want to know where their drinks come from.
  • According to Mike Moreno of Moreno’s Liquors, a store that stocks 700 different varieties of tequila, “a lot of connoisseurs will notice if a tequila’s denomination number is off. Some companies will change distillery to save money, which can negatively impact the flavor profiles. So people really want to know now where their tequila comes from, the same way that a whiskey drinker today will want to know what company is behind something like Eagle Rare.”
  • Off-premise sales growth/ decline of the top Tequila brands over 52 weeks ending Jan 26, 2020:
    • Consumers have moved from cheaper tequilas to craft alternatives such as Patron and Don Julio 1942. “People are willing to pay those prices on an every-day basis for what tequila they drink every week,” says Jeff Feist, category lead, spirits and more, for BevMo. “Premium tequila is no longer just a special occasion.”
    • “Drizly’s Top-Selling Tequilas, 2020 (through July 28):”
      • Casamigos
      • Don Julio
      • Espolon
      • Patron
      • Jose Cuervo
      • Clase Azul
      • 1800 Tequila
      • Hornitos
      • Milagro
      • Herradura
    NEW TEQUILA BRANDS, TEQUILA CONSUMPTION, TEQUILA BRAND PERCEPTIONS, TEQUILA INNOVATIONS & STRUGGLING TEQUILA BRANDS

    Tequila Brand Perceptions

    Consumers perceive both Casamigos and Don Julio as a high-end alcoholic drink. People who drink them appreciate the smoothness, the aromas, and the flavors of both brands. The brands have positioned themselves as the favorites of celebrities and men who smoke cigars in leather chairs in clubs.

    Casamigos Tequila

    • On the Flaviar website, Casamigos is been given an 8.4/10.
    • A summary of the 179 reviews states that Casamigos is “adored for its smoky, caramel, vanilla and butter flavor notes.”
    • Another review stated that “I’m typically not a big tequila fan, but this is the one tequila I will drink. Incredibly smooth with an amazing smokey, buttery, vanilla nose and the taste perfectly pairs with the nose.”
    • The Influencer website gives Casamigos a 5/5 from 617 reviewers.
    • One of the most complete, compelling reviews in the last year said “Where do I even begin…well first, I have had a hatred of tequila for my entire adult life. The smell, the taste, everything about it made me want to puke. However, a friend of mine made me take a shot and my life has been forever changed. Casamigos, while a tad on the pricey side, is hands down the best tequila I have ever tasted. While I did just say I hate tequila, after my first shot of Casamigos, I went on a little tequila kick and have tried a ton of different brands. But I keep coming back to Casamigos. It goes down like water, no burn, and a great taste...you don’t even need a lime. My drink of choice now, a shot and a sip of lime seltzer with a splash of lime juice….talk about a low calorie, yummy drink. Do yourself a favor and give it a try!!”
    • Men’s Journal calls Casamigos the “World’s Best.”
    • The brand was launched by George Clooney and Rande Gerber, and Mike Meldman.

    Don Julio

    • The Don Julio website lists six different tequilas. They include Blanco, Reposado, AÑEJO, 70®, 1942®, and REAL®.
    • Tequila Reviews describes Don Julio Blanco this way. “The hint of citrus notes that feature lemon, lime, and grapefruit make this a perfect sipping tequila made simply on the rocks, or as the base in your margarita. This one drinks light and sweet from start to finish.
    • The same website describes the Don Julio Reposado as a golden amber reposado that is aged eight months (four times the industry standard) in American white-oak barrels. The smooth taste has both dark chocolate and vanilla and even some light cinnamon. The finish features dried fruit, nuts, and even a hint of caramel apple.
    • On the Influencer website, Don Julio Blanco has a 4.5/5 rating from 5,767 reviews. Comments include “I bought this tequila when I tried it out at a party. I can tell you it not that expensive and it truly does have a great taste to it. This another tequila that I personally keep at my house for whatever occasion comes up. I could also recommend this tequila to anyone.”
    • Another consumer felt this way “As a self regarded tequila connoisseur, I have to say Don Julio is one of my favorites, especially the Blanco. No need to muddle the taste with salt and lemon, it tastes great on its own. Very smooth and flavorful. Very obviously a high level, clean product.

    Tequila Innovations

    This report collects three recent products symbolizing innovations in the tequila industry. Don Julio’s Reposado Double Cask embraces the trend toward premium aged tequilas. Califino Blanco is aimed at the health-conscious consumer with its emphasis on agave. Mamitas Tequila & Soda combines two themes into an on-the-go product, being the first of its kind on the market.

    1. Premium Aged Tequila: Don Julio Reposado Double Cask

    • Per Beverage Dynamics, many brands are innovating the best in the aged categories of añejos or reposados.

    2. Health Conscious Agave-Centric Tequila: Califino Blanco

    3. Tequila Soda: Mamitas Tequila & Soda

    • Continuing the trend toward marketing toward health-conscious consumers is Mamitas Tequila & Soda, a tequila and soda offering from Phusion Products released on September 2, 2020.
    • The growing ready-to-drink industry category inspired the development of the “adventure ready four pack” of tequila and soda, which is the first of its kind.
    • Mamitas Tequila & Soda is gluten-free, which will have greater appeal toward the growing number of health-conscious tequila consumers.
    • Per Jaisen Freeman, Co-founder at Phusion Projects, “With tequila now trending as a better for you spirit, we carefully crafted Mamitas to elevate the hard seltzer category. Mamitas complements an active lifestyle and doesn’t sacrifice taste. Creating Mamitas was a no brainer for us.”

    Struggling Tequila Brands

    Cascahuin Tequila and Arette Tequila are some of the tequila brands that are currently struggling in the US market when bars and restaurants were closed due to COVID-19 induced restrictions. After thorough research through tequila industry associations, news websites, and industry third-party sources/blogs, we found out that tequila sales have been increasing during the last few years, with sales skyrocketing during the COVID-19 crisis. However, while bigger tequila brand sales are increasing, smaller tequila producers are struggling to stay afloat.

    Small Tequila Producers are Struggling to Survive

    • The COVID-19 lockdown restrictions in many parts of the United States saw an increase tequila sales by 60% during the four weeks to April 25. On the other hand, however, the sales of small tequila brands like Cascahuin were plummeting to record lows.
    • Shortly after bars and restaurants were shuttered in the US, the Cascahuin Tequila distillery halted operations, and by the end of April, sales were down 20%.
    • According to Salvador Rosales Trejo, a third-generation tequila producer in El Arenal, Jalisco, small tequila producers are trying to maintain and support their employees as other tequila producers brace for an unknown future.
    • The small tequila brands are struggling because they were popularized by bartenders, effectively making bars and restaurants their most critical sales channel. When restaurants and bars were closed due to COVID-19, the small tequila brands’ sales plummeted.
    • Another small tequila brand that is struggling as a result of the COVID-19 crisis is Arette Tequila. According to Eduardo Orendain, a fifth-generation family member and sales manager for Arette Tequila, “all the small producers are 50 or 60 percent down in sales, no matter who you talk to.”
    • Besides, people were nervous about money, and they were stocking up on more popular brands; hence they were not adventurous in trying new brands they’ve not heard of.

    How Brands are Navigating

    1. Virtual Connections With Consumers

    • Since most small tequila brands could not sell on-premise, some resorted to connecting directly to consumers using virtual means. These brands offered consumers guided tastings, tours, and live conversations through Zoom and social media.

    2. Experimenting with Smaller Bottles

    • Producers of mezcal, tequila’s sister spirit, are looking to experiment with smaller bottles since consumers are getting their feet wet when it comes to ordering spirits online, and they may look to order smaller bottles.

    COVID-19 Impact: Alcohol Market

    On-Premise

    • 28% of US people claim to be drinking less since the pandemic started. 38% of those people stated that the reason they are drinking less is that bars and restaurants are closed.
    • The sales of on-premise liquor are not expected to rise to pre-COVID levels until 2024.
    • The pandemic is causing restaurants to start offering alcohol in their takeout and delivery offerings. 14% of survey respondents said they began ordering alcohol with takeout orders in April 2020.
    • The pandemic caused an estimated 85% to 95% of bars to temporarily close their doors in the US, and 20% of those are expected to close permanently.

    Off-Premise

    • The sale of off-premise alcohol rose 27% in the US during the pandemic.
    • The online sales of liquor also tripled between February and April 2020.
    • The demand for larger quantities of alcohol has grown, with people buying ten times more boxed wine and 27 times more 1.75 liter liquor bottles.
    • During the pandemic, there has been a double-digit sales growth in larger packs of beer, such as 24 and 30-packs.
    • The Republic National Distributing Company experienced a 50% growth in liquor and wine sales just in the week ending on March 21, 2020.
    • Drizly, an e-commerce store called “the Amazon of liquor”, saw a 300% increase in sales during the pandemic.
    • Winc, a wine subscription club, saw a 578% increase in the number of new subscribers at the end of March 2020.

    Tequila

    • Tequila saw a sales growth of 75% during the pandemic and is the most purchased type of liquor right now.
    • Premium tequila that is imported internationally is expected to recover its sales numbers by 2021.

    Global Notes

    • The global alcoholic beverage market is expected to have slower growth from 2019 to 2020 due to COVID-19.
    • The market is expected to reach $528.5 billion, growing at a CAGR of only 2.6%.
    • The market is expected to recover at a CAGR of 7% from 2021 to 2023.
    TDM

    U.S. INNOVATION, PRODUCTION AND MANUFACTURING TRENDS AND PRODUCTION PERFORMANCE INDICATORS

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