What Kind of Return Can I Expect From Creating My Own Tequila?
Read Time: 4 min.
Launching a tequila brand is a major enterprise. It’s exciting, it’s high-prestige, and there is incredible potential for success. The ultra-premium tequila market is booming right now, and with a focused marketing strategy and a strong brand, there is a lot of potential.
But even so, it’s important to know what you can realistically expect from your investment. Knowing the market, the industry, and where your money is going is critical to planning and forecasting. You might discover new product potential that you hadn’t considered before, and perhaps even a few adjacent niches that could help to strengthen your brand, both in Mexico and your target markets.
How Much Do You Know About Tequila?
Getting to know tequila is the crucial first step. How much do you know about the spirit, the agave, and the tradition behind it? Yes, there is a growing interest in tequila in international markets, but if you’re going to be in the tequila business, knowing everything there is to know about it is a good place to start.
Tequila is a culture unto itself. Take the time to get to know the people, the processes, and the traditions. When you have a connection to the place, its people, and its history, it will be that much easier to sell it.
Know Your Niche Market
It doesn’t matter how amazing your product is; it won’t sell unless you’re approaching it the right way. You can’t sell ice cubes to polar bears. Your niche market holds the key to your success. Knowing your ideal customer and what speaks to them is essential if you want to rise above the competition.
Once you have identified your market, you must dive deeply into trends and statistics to see what’s possible. You need a well-crafted marketing plan and a brand that connects, not only with your customer’s needs but the needs of the market itself.
What Are The True Costs To Bring Your Product to Market?
Aside from the cost of developing and packaging the product, you need to think about what it will cost to get it into your customer’s hands. Every link in the supply chain has an associated cost. Some are negotiable; some are not. You have one-time fees and ongoing expenses.
Plus, there are always unknown factors to consider. You must be prepared for any contingency. Finding the right partners at the outset is essential. You need trustworthy partners who will work with you to optimize costs and reduce risk. Knowing the potential risks beforehand will help you choose wisely and avoid any unwanted surprises.
Once you have your estimated costs—we often stress that you should consider the worst-case scenario, just to be sure you’re on the side of caution—you can set a break-even point and a timeline to reach it.
Why Invest In A Tequila Business Right Now?
If you are considering investing in a tequila business in 2021, you could not have chosen a better time. Markets are high, and demand is growing for premium and ultra-premium tequilas, and it’s easier than ever to work with a quality-minded producer who will help you succeed.
If you haven’t already done so, ask yourself what you expect to achieve financially from this venture? Based on the projections you have made in terms of production, logistics, and marketing, how long would you have to wait to see that happen?
Is A Tequila Brand A Safe Investment?
Any investment comes with its share of risks, and beverage alcohol is no exception. Yes, it is a growing category, and many brands, like Casamigos, Cabo Wabo, and Patron, have profited remarkably and continue to thrive.
Now, there’s no guarantees you’ll make a billion dollars in four years’ time, but there are some lessons to be learned from these high-profile brands. Here’s what they all had in common:
- They understood their niche market.
- They were unabashedly innovative.
- They appealed to their audience and their desires.
- They raised enough money to do it right from the start.
Of course, not everybody is George Clooney. You don’t have to be a celebrity to make a premium tequila brand successful, and there are plenty of brand success stories to prove that. Even so, doing it right means you need to put in a lot of time, effort, and tenacity to keep the momentum strong. You have to believe – which means you need a clear vision to begin with. If you don’t believe it, nobody else will either. But when you do, when you’re passionate about the product and the brand, you’ll have a much better chance of cracking that market and reaching your break-even point in four to five years.
It’s not unusual for new brands to go through two or three rounds of fundraising to get to where they’re self-sustaining. It won’t be a walk in the park, but if you have a systematic approach, a flair for innovation, and plan your process down to the last detail, there is incredible potential for success.
Tell us more about your tequila project! Reach out today to learn more about how we can help.