Premiumization and Storytelling could help Tequila further accelerate its growth

April 09, 2019

For many years the word “Tequila” was associated with shots and Margaritas. This perception is changing though and Tequila is now gaining consumers share of mind and preference as premium product. This due to the efforts Tequila brands have made to premiumize through differentiation in price points, types of liquid and variety of bottle designs.

Tequila, recognized as a Mexican designation of origin product in more than 40 countries, is a regional distilled beverage. To be considered Tequila, according to the appellation of origin, it needs to contain a 100% Blue Agave Weber for a premium Tequila or at least 51% for a regular or more mainstream one.

Back in 2012, the total Tequila production was 253.2 million liters, with 55% being for regular/mainstream brands and 45% premium ones. In 2018 the total production of Tequila was 309.1 Million liters (+22% vs 2012) and the mix between premium and regular Tequilas switched to 45% for regular and 55% for premium brands, which grew almost +50% in 6 years. (Source: Tequila Regulatory Council- Mexico)

Today, Tequila remains the biggest Spirits sub-category in Mexico, with a 27% share of the total spirits category volume, (Source: IWSR) and the exports have grown 34% driven by the premium brands that grew 78% (2018 vs 2012. (Source: Tequila Regulatory Council- Mexico). Yet, overall Tequila remains relatively small in the worldwide Spirits picture and there is still so much more room to grow by continuing to bring value to the product, by innovating and educating consumers around the globe.

According to an article published in the Spirits Business earlier this year, “It is broadly acknowledged that Tequila needs to do more to capture the imagination of discerning drinkers. And given the strong growth of the category, and its notable achievements, maybe we shouldn’t be too hard on it. But in a climate where consumers are embracing experimentation and seeking out more information about the drinks they consume, there is a risk that opportunities are being wasted.”

As consumers turn to more sophisticated (premium) products, they expect to be taken onto a journey with each product and brand they choose to pay more for. Each brand needs to promise a unique experience. And that promise needs to be told to consumers across all touch points, with packaging being one of the most important vehicles for that story.

Creativity on graphics and glass bottle shapes has played a decisive role in the fight for differentiation at the point of sale among Tequila brands helping them to tell their own story and to position themselves in different premium, super-premium and ultra-premium price tiers, through the magical play between the liquid, the image and the bottle.

For Tequilas, the bottle design provides the enchantment of being perceived as the perfect gift for a special occasion and a symbol of luxury, with a taste of Mexico to the world. 

Tequila Photogalery2