Nature abhors a vacuum — and so does the spirits business, apparently, where suppliers rush to fill in the gaps between what consumers want and what is already on the market. Case in point: tequila.

Like bourbons, Scotches, cognacs and vodkas, tequila suppliers have been marketing an increasing number of superpremium and ultrapremium tequilas, benefiting from the American consumer’s move to upscale spirits with cachet and a story to tell. At the same time, the premium and popular brands, chiefly Jose Cuervo, continue to power the tequila engine forward. Indeed, 1998 sales for the category were strong once again, approaching double-digit percentage growth nationally and show no signs of abating as the 20th century’s final year begins. In fact, in the control states, the tequila category increased 9.2% overall (for the 12 months through October 1998) to sales of more than 1.1 million mixed cases, according to Adams Media Research.

More than half of that control state volume belonged to Jose Cuervo, from UDV North America, with sales of more than 518,000 mixed cases, reflecting a 10.7% increase from the previous year. And Allied Domecq’s Sauza grew an impressive 51.7% in the control states, reflecting the brand’s healthy nationwide increase. Other brands that showed double-digit percentage increases in the control states include Allied Domecq’s Giro (up 12.9%), Two Fingers Tequila (up 13%), from Heaven Hill Distilleries, and David Sherman Corp.’s Juarez Tequila (up 13.5%).

New tequila introductions seem to be happening monthly — one supplier noted that 24 new tequilas appeared on the market in 1998. In addition, more tequilas are boasting of high quality, craft-like aging, new flavors, more sophisticated packaging and slick advertising and promotional support. Like their counterparts in those other spirits categories, tequila marketers are sparing no effort in educating drinkers about the history, quality and variety that can be theirs.

A jimador harvesting an agave plant.

“The high end is exploding,” declared Kathleen DiBenedetto, director of superpremium brands for Jim Beam Brands Co., which markets a trio of tequilas: Chinaco, El Tesoro, and its newest, Paradiso. “In general, all the high-end spirits are growing, but I think what’s different in tequila is that even the base business is growing. People are really discovering it and drinking it.”

Ted Hissey, senior vice president and general manager for UDV North America’s Cuervo tequilas, said tequila’s allure stems from the fact that there are two primary ways to consume it — straight, through shots or sipping, and in the wildly popular Margarita. He predicts a lot more activity in the high end, as well as the beginnings of some shake-out there “because there just isn’t enough room on the back bar or on that top shelf in the liquor store for all these brands. The one category that’s really hot right now is the 100% agave reposado.”

Cuervo 1800 A


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