The tequila boom has gained momentum during the pandemic. Sales continue to impress at retail and ecommerce platforms like Drizly — while celebrities including The Rock and Pitbull have gotten into the game.
What’s going on? Reasons for this category’s sustained growth tie into the current crisis and also transcend it.
The same can be said for Drizly. Already a leader in the rapidly expanding market for digital alcohol delivery, the service has grown exponentially during the Covid crisis. The company recently released a report highlighting the success of tequila on their platform in 2020. For a deeper dive into this topic and its broader implications, we recently spoke with Liz Paquette, head of consumer insights at Drizly.
StateWays: Drizly data shows tequila growing faster this year. Why?
Liz Paquette: Tequila has been growing pretty steadily for the past five years or so, but from 2019 to 2020 the category has seen its largest growth. Tequila has been assisted by the pandemic.
One big thing is the broader trend of cocktail-making at home. More people are mixing up cocktails at their homes and tequila is in the middle of that.
Timing-wise, Cinco de Mayo was in the midst of this pandemic, and many people celebrated at home by mixing up their own margaritas.
Another factor is premiumization in the spirits category. Overall, during the pandemic, spirits sales have overtaken wine at Drizly for the first time. And tequila has been at the forefront of that growth.
SW: Really? Spirits sales have overtaken wine?
LP: Yes. Part of it ties into general cocktail culture. Another is the health-conscious consumer with a greater desire to know what’s in the products they’re consuming. And spirits may have more transparency now than what you would necessarily get from wine.
And with tequila, there’s greater diversity now. The category has evolved beyond ‘grab a shot at the bar’ into beautiful, complex craft tequilas.
Hard seltzer has also played a role in this as well. Hard seltzer this month accounted for 25% of all beer sales. That’s cutting into wine sales.
SW: Do you see at-home mixology continuing post-pandemic?
LP: Yes. First of all, people have invested all this time and energy into their cocktail-making skills. They’re comfortable mixing at home now.
Secondly, people have also invested in building out their home bars. Cordial and liqueur sales are through the roof now at Drizly.
And there’s also the rise in RTDs, which are also through the roof in sales. People know they can mix at home or buy products that give them more of a cocktail culture at home.
SW: Will the premiumization trend sustain, given the economy?
LP: Broader economic factors could play a role. But historically, times of recession are less about the opposite of premiumization as people looking at spirits as an affordable luxury. People see premium spirits as providing an upscale feeling at home, without splurging. I see that remaining a priority.
SW: Circling back, do people really see tequila as ‘healthier’?
LP: Lighter spirits in general are benefitting from the overall shift towards healthier lifestyles. Silver and blanco tequilas, whether actually healthier or not, some people do lean that way specifically because of the wellness trend.
SW: Casamigos remains Drizly’s top-selling tequila. Why?
LP: There really is some allure to these celebrity-led brands. That definitely plays a role. And Casamigos is also a good product. The ‘cool’ factor of the celebrity helps sell the tequila, and then after people try it they realize it’s a good value for the buck.
SW: Espolon is in the top 3. All our Millennial friends drink it. How come?
LP: Espolon was one of the first craft tequilas to come out from a value standpoint. So it’s become a recognizable brand. And at the beginning of the pandemic, people were returning to products that they knew and recognized. In a time when experimentation may not be as high, it’s a good bet to lean on.
SW: What’s the future of tequila?
LP: I suspect that it will continue to grow. This is the next category to watch, for sure, from a shelf perspective. More and more consumers are demanding tequila. We continue to see more and more craft options come out, and we expect the tried-and-true brands to also continue doing well. I think there will be lots of growth and innovation within the category in the future.
Kyle Swartz is editor of StateWays Dynamics magazine. Reach him at firstname.lastname@example.org or on Twitter @kswartzz. Read his recent piece COVID-19 is Fueling a Home Mixology Movement.