As of 2022, the tequila market has reached an impressive size of US $14.7 billion. According to IMARC Group, the market is expected to continue expanding and reach US $30.3 billion by 2028, showcasing a remarkable compound annual growth rate (CAGR) of 12.3% from 2023 to 2028.
Tequila is a distilled alcoholic drink made from blue agave plants also known as the Agave Tequilana. Originally from Mexico, tequila has become increasingly popular in the world but specifically in the United States, and its popularity is projected to continue rising. This growth is attributed to tequila’s distinctive taste and “mixability”, which allows for a variety of flavorful cocktails. As more consumers discover tequila’s unique qualities, the spirit is poised to cement itself as a staple in bars and liquor cabinets across America.
The Rise of Tequila – A Growing Market
The tequila market is expanding due to increasing consumer preference for agave-based spirits. Tequila is distilled from the fermented sap of the maguey (agave) plant, a traditional Mexican alcohol that has been produced for centuries. As more Americans purchase imported tequila and agave spirits, demand is rising. Retailers are also allocating more shelf space to tequila to accommodate higher sales. For example, CNBC reported that U.S. sales of agave-based spirits jumped 30.1% year over year to $5.2 billion in February 2022. Overall, the growing popularity of agave spirits among consumers is fueling the growth of the tequila market.
Customers’ Interest in Tequila
Tequila has come a long way from its early days as a “party” drink. Today, it is a respected premium spirit that is enjoyed by connoisseurs around the world. Tequila’s unique flavor profile and versatility as a cocktail ingredient has made it a hit with people of all ages and backgrounds. Perhaps the biggest reason behind the surge in tequila sales is the millennials, who are now the largest demographic group in the US. Millennials are more adventurous and willing to try new things than previous generations. Combine that with an increased focus on sustainable, organic, and locally-sourced products, and you get a perfect environment for tequila sales to thrive.
How to Capitalize on the Tequila Craze
To take advantage of the growing market of tequila, liquor store owners must have a good understanding of the various tequila types. There are four tequila categories — Blanco (silver), Reposado (rested), Añejo (aged), and Extra Añejo (extra aged). By knowing the nuances of each category and stocking books that cater to all types of budgets, you can provide customers with an endless variety of options. Additionally, hosting tequila tastings and other events can introduce customers to new brands and help build brand loyalty.
Boosting Sales Through Marketing and Promotions
Marketing and promotions can be a game-changer in the liquor industry. With tequila as your central product, put out marketing campaigns that focus on the range of different flavors tequila offers. Collaborating with mixologists to develop novel cocktails and hosting tequila masterclasses go a long way in building goodwill among customers. Offering discounts, free samples, and reward programs to customers loyal to your store can also help boost sales.
Exploring Cocktail Trends: Tequila Takes Center Stage
The traditional way of drinking tequila in Mexico is to savor its various notes and flavors, but many patrons prefer mixed drinks like the Margarita. Despite other trendy cocktails, the Margarita remains the go-to drink at most on-premise locations. However, other tequila-based drinks, such as the Paloma, El Diablo, and Ranch Water, have been picking up steam lately. For instance, Chili’s Grill & Bar recently launched a Ranch Water option in all of its 1,600 restaurants, which should help spread the popularity of tequila, sparkling water, and lime beverage across the country. Additionally, tequila itself can be used in craft cocktails and given a spicy twist on classic recipes.
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IWSR. (2021, July 22). Tequila volume overtakes bourbon and rum in the US – why? Retrieved September 1, 2021, from https://www.theiwsr.com/tequila-volume-overtakes-bourbon-and-rum-in-the-us-why
CNBC. (2022, February 5). Tequila could overtake vodka as America’s top liquor as sales boom. Retrieved September 1, 2021, from https://www.cnbc.com/2022/02/05/tequila-could-overtake-vodka-as-americas-top-liquor-as-sales-boom.html
Fortune Business Insights. (2021). Tequila Market Size, Share & COVID-19 Impact Analysis, By Type (Blanco, Reposado, and Anejo), Quality (Mass, Premium, and High-end Premium), Distribution Channel (On-trade and Off-trade), and Regional Forecast, 2021–2028. Retrieved September 1, 2021, from https://www.fortunebusinessinsights.com/tequila-market-104172