The Premiumization of the Tequila Industry

Once considered to be a shot only suitable for consumption with a chaser of salt and lime. Tequila has followed hot in the footsteps of the most prestigious brands of gin, vodka, or whiskey, becoming the latest spirit to go through a process of premiumization.

High-quality sipping tequila has become hugely popular in recent years and, according to the drinks market analysis company IWSR, is now the second-fastest growing spirits category, with a nine percent year-on-year growth. 

Since 2002, data from The Distilled Spirits Council has shown an incredibly 706 percent increase in the sale of super-premium tequila, with global sales volume increasing by 64 percent. 

Tequila has become so popular

Why Has Premium Tequila Become So Popular?

There are two primary reasons for the sudden surge in the popularity of premium tequila.

Firstly, the tequila industry has undergone a period of experimentation and evolution, moving from the bulk production of cheap spirits to a more super-premium product. 

A good example of this would be Patrón Tequila, which has played a similar role to Grey Goose vodka in stimulating the market for premium versions of what was once regarded as a low-end spirit.

With the success of Patrón, other major players in the tequila industry have turned their attention to producing a premium product. 

However, unlike premium spirits such as cognac and single malt whisky, the tequila sector hasn’t been closed off by aging legislation or trade body standards, allowing new and innovative brands access to the market.

Market and demographic changes have also massively increased the demand for super-premium tequila. 

Demographic change in the USA, the second-largest consumer of tequila, has seen a renewed interest in all things Mexican, including Mexican spirits such as mezcal and tequila. This has resulted in a 30 percent rise in sales since 2014.

Additionally, drinking habits amongst young drinkers have moved away from cheap shooters and towards high-end sipping spirits and cocktails. 

While Mexico and the USA are still the dominant markets for tequila, there has been a significant rise in global demand, as premium tequila becomes more popular in Asia and Australia. 

The IWSR predicts that this market expansion will result in a 20% increase in the global demand for tequila over the next five years.

What’s Next for Premium Tequila?

There are a number of trends in the growing tequila premium space that look promising for investors, distillers, and drinkers alike. 

If you’re a celebrity or investor looking to create your own tequila private brand, the market sector is far easier to get into than other premium spirit markets. Just ask Dwane “the Rock” Johnson.

Distillers are now able to invest in creating innovative products, knowing there is a significant market for them. The massive popularity of tequila cristalino and 100 percent agave tequilas are a great example of this trend. 

As new brands, new expressions, and methods both new and very traditional come onto the market, the rapid growth of the premium tequila market looks set to continue.

Contact Aceves Spirits

Now is an excellent time to consider starting your own premium tequila brand and your first step should be to partner with an expert in the field. 

With three generations of tequila development experience and an unwavering commitment to award-winning quality and sustainability, Aceves has the knowledge and skills to help you create a market-leading brand of premium tequila.

Contact us today to find out more.