Tequila’s New Revolution

Fresh-tasting. Light. Versatility and mixability. More than just shots. These characteristics have helped the tequila category evolve into what it is today.

‘€œThere is sophistication toward the category that did not exist a decade ago,’€ says Andrea Sengara, Global Director, Tequila Don Julio. ‘€œThe consumer of today is well traveled and versed in spirits such as tequila.’€ As a result, the category is revolutionizing itself, adding new iterations, re-designing labels to emphasize history in the modern day, and educating on the ways’€”beyond the simple answer of taking shots’€”it can be imbibed and enjoyed. ‘€œThe consumer is becoming more interested and more educated and wants a better tequila experience,’€ says Jesus Ostos, Brown-Forman’€™s tequilas brand marketing group manager.

And the products reflect that from premiumization to eye-catching packaging to new products that not only have 100% agave but also use fresh ingredients. ‘€œThe introduction of reasonably priced 100% Agave Tequilas is the primary trend in the category,’€ explains Joshua Hafer, corporate communications manager for Heaven Hill Distilleries, which imports Lunazul.

The tequila category as a whole is up 3.8% from 2010 to 2011, according to the Beverage Information Group’€™s 2012 Handbook Advance. Although the category’€™s leader, Jose Cuervo, was down slightly in 2011, last year proved to be a successful one for many of the leading brands, up 5.8% to 10,196,000 cases. Patron (up 6.5%), Sauza (up 9.9%) and 1800 (up 17.0%) showed significant growth, while Juarez (up 4.1%) and El Jimador (up 4.7%) displayed more moderate growth. But it was E. & J. Gallo’€™s Familia Camarena that stole the show: leaping into the top 10 tequila brands and more than tripling its sales in its second year on the market to 250,000 9-liter cases.

Innovative Assets

Sometimes a new label or a bottle redesign is enough to hold the buzz within the tequila category. But this year, brands are not only unveiling eye-appealing packaging but they are also releasing new products.

Milagro Tequila announced the limited release of UNICO in March. Only 1,200 bottles were produced of this micro-distilled joven blend with a numbered release in the on- and off-premise. UNICO features 40% alcohol by volume and a $300 SRP, all packaged in a unique bottle that features the heart of the agave plant, the ‘€œpina,’€ hand-blown inside the glass.

To celebrate its 70th anniversary last year, Tequila Don Julio released the world’€™s first clear anejo, Tequila Don Julio 70 Anejo Claro. This tequila is as complex as a traditional anejo, but it’€™s filtered to embody the crisp agave flavor of a blanco. ‘€œA first of its kind, it is a true representation of the evolution of Añejo tequila and is produced using a careful process designed by Master Distiller Enrique de Colsa,’€ Sengara says. Available as of fall 2011, the 750 ml bottle retails for $70.

Already seeing success with the Patron XO Cafe coffee liqueur line, Patron launched its first brand extension: Patron XO Café Dark Cocoa. Dark Cocoa mixes Patron Silver tequila and coffee with a chocolate flavor to create an ultra-premium liqueur. Available in 50 ml, 375 ml and 750 ml bottles, Dark Cocoa is packaged in a handmade Patron XO Cafe glass bottle with a label and outer box that are accented in bold red.

Jose Cuervo rolled out distinct changes to the packaging of its best-selling Especial Gold and Silver lines last summer. ‘€œDemonstrating Jose Cuervo’€™s family motto of ancestry, prestige and tradition, the design change reinforces Jose Cuervo’€™s history with an authentic new look,’€ says Ami-Lynn Bakshi, Diageo Vice President, Marketing, Jose Cuervo. The bottle is described as having sleek, hard lines, and labeling with a new neck design, a watermark and belly band. The back label contains the rich history of the product, honoring the craftsmanship, Mexican heritage and family tradition that is more than 200 years old. ‘€œOther notable changes are the embossing of the Jose Cuervo signature prominently displayed on the side profile and bold cap colors’€”deep red for Especial Gold and royal blue for Especial Silver,’€ Bakshi explains.

Not to be forgotten is Jose Cuervo’€™s Reserva de la Familia line, of which it unveiled a limited edition in 2011 with another to follow in 2012. The Cuervo family has been selecting a Mexican artist to paint the handcrafted wooden boxes of this ultra-premium tequila since 1995. The 2011 box was styled by tattoo artist Jerónimo López Ramírez, known in the tattoo community as ‘€œDr. Lakra.’€ ‘€œThe 2012 limited-edition handcrafted wooden box depicts paintings of two famous Mexican painters, Frida Kahlo and Diego Rivera, and will debut this summer,’€ Bakshi says.

Soccer is the star on new labels released in 2012 by Brown-Forman’€™s el Jimador brand. Jesus Ostos explains that the new labels are the brand’€™s answer to tequila’€™s trend of being a package-driven category, and to celebrate their sponsorship with soccer’€”the U.S. National team, the Mexican National team, and Major League Soccer (MLS)’€”el Jimador released special commemorative bottles. MLS is celebrated on el Jimador Blanco, while the Mexico is featured on the Reposado and the U.S. is showcased on the Anejo.

Embracing the flavored fold, Proximo Spirits recently introduced 1800 Coconut. Described as an infusion of coconut flavor and 1800 Silver Tequila, this 70 proof product gives a different spin to flavored tequila.

Trendsetting Tequila

Unless you’€™re the Gerber baby, it’€™s not every day that consumers can find their mugs on a label. Jose Cuervo is making the seemingly impossible possible with customized label program that’€™s running through June. In select retail locations and through a Facebook application, consumers 21 and older can have their picture placed on their own bottle of Jose Cuervo Especial Gold or Silver. The Facebook application is featured on the Cuervo page and allows fans to create a customized label for an Especial bottle. ‘€œFacebook is the social media hub for Jose Cuervo, where we engage our consumers in two-way dialogue and empower them to share their affinity for our brand with others,’€ Bakshi says.

The new release, KAH Tequila, has been winning several awards for its product and packaging. Designed to honor Mexico and its people, the Blanco, Reposado, Anejo and Extra Aged Anejo varieties are certified organic and Kosher. Plus each bottle is a hand-crafted work of art.

Somewhat new to the tequila fold, Heaven Hill’€™s Lunazul line is growing by leaps and bounds to the point where consumers and retailers will continue to see broader accessibility to the products. ‘€œThe franchise is growing at breakneck speed with 23% growth in 2011,’€ explains Hafer. ‘€œEven with the brand’€™s success it is still a fairly young brand and there is still a large portion of the consumer base that has not heard of the brand. So, we have engaged a national consumer media campaign with online and print advertising to further support the brand and increase awareness.’€ And even before that, Lunazul completed a label re-design to share more of the brand’€™s heritage story and increase the prominence of 100% agave. The brand also rounded out its portfolio with Lunazul Anejo, an affordable, small batch anejo tequila.

Seasonal Serenade

Cinco de Mayo celebrations often revolve around tequila’€™s favorite cocktail, the Margarita, but the holiday is only the start of a summer of tequila celebrations. This summer Patron will launch the ‘€œSummerology’€ program that is designed to promote the spirit’€™s mixability and versatility. The brand is prepared to accomplish this through events, a digital experience, retail point-of-sale pieces, printed summer guides and off-premise sampling by Patron ‘€œsummerologists.’€

Last summer, Jose Cuervo re-emerged onto the beach volleyball scene and established the Jose Cuervo Pro Beach Volleyball Series. ‘€œHelping build the sport for the players and fans, the Jose Cuervo Pro Beach Volleyball Series will return with an exciting format which includes world-class competition and a National Championship,’€ Bakshi says.

Striving to educate tequila fans with the motto ‘€œKnow Your Tequila,’€ Tequila Don Julio has initiatives planned around the seasons. ‘€œAs we look forward to summer, Tequila Don Julio will focus on providing tequila aficionados, industry professionals and consumers with the essential tips and events to have the ultimate summer experience,’€ Sengara explains. ‘€œWe will embrace the ultimate expression of summer cuisine, grilling, by pairing outdoor dining with tequila.’€ Moving into fall and winter, the focus shifts to the holidays, especially gifts and entertaining.

Celebrity Creations

Following in the footsteps of 2011’€™s 901 Silver tequila, which listed actor and pop star Justin Timberlake as its CEO and founder, more celebrities are stepping up to the plate in 2012.

After seeing success with his Ciroc vodka, Sean ‘€œDiddy’€ Combs has been hinting since late December 2011 that he might be expanding into the tequila market.

Combs isn’€™t the only one developing a new tequila. George Clooney is set to do the same with restaurateur Rande Gerber, supermodel Cindy Crawford’€™s husband. The brand, Casamingos Tequila, is expected to be released in 2012.

Many know him for his music and not for his love of tequila, but last July music icon Carlos Santana joined the Board and became one of the owners of Casa Noble Tequila. The partnership allows Santana to be involved in the brand’€™s development. ‘€œSantana’€™s personal philosophy of quality and integrity in the pursuit of perfection is synonymous with the Casa Noble brand of fine ultra premium Tequilas,’€ says Casa Noble CEO Jose Hermosillo. ‘€œThe linkage between Casa Noble and Carlos Santana will create broader recognition that Casa Noble’€™s triple distilled, organically certified tequila is truly one of the finest ultra premium spirits.’€

In February, Azunia Tequila, the ultra premium brand imported by Intersect Beverage, announced that it had formed a partnership with Bill Walton, the NBA Hall of Famer, former sports broadcaster and entrepreneur. In December 2011, Azunia named world-class surfer Sunny Garcia as one of its brand ambassadors.

Major League Partners

Familia Camarena is partnering with Major League Baseball teams across the country. When the 2012 season kicked off, so did announcements that the brand had renewed marketing sponsorships with six teams. And that’€™s in addition to the marketing sponsorships it held in the fall and winter with select NBA teams like the Phoenix Suns and Orlando Magic, and NFL teams like the New York Jets and Dallas Cowboys.

Familia Camarena isn’€™t the only brand partnering with professional sports. El Jimador has found its niche with Major League Soccer as well as the U.S. National Team and the Mexican National Team. In 2012, el Jimador announced its sponsorship of these three teams and released special labels to reflect its tie to soccer. The brand also plans to showcase its presence with soccer through summer promotions. The brand also nabbed Alexi Lalas, an American soccer player with several accolades including induction into the National Soccer Hall of Fame, as its brand ambassador. ‘€œHaving an individual of Alexi’€™s profile represent el Jimador will serve as a huge asset for the brand as we expand our soccer platform and continue to grow our corporate social responsibility initiative,’€ Ostos says. The brand also created the Cinco de Jimi Cup contest, accompanied by promotional in-store materials, where 11 prize winners will have the opportunity to play soccer with soccer legends on the U.S. and Mexican National teams. El Jimador showcases that soccer is part of its brand, not only with themed retail point-of-sale pieces, but with online videos airing on ESPN, MLS.com and Facebook.

Tube Talk

From advertising space on mainstream television to product placement in popular television shows, tequila brands are for all eyes to see. It started with Entourage, the HBO hit that featured Tequila Avion in 2010.

Proximo Spirits 1800 launched a major $18 million television advertising campaign in the middle of 2011 that paid homage to The Sopranos by featuring Michael Imperioli. It’€™s not the first time 1800 Tequila has appeared on television, and Imperioli is reprising a role he played for the brand’€™s first foray on cable television in 2009. The eight different spots showing the evolution from the previous campaign launched on ESPN last May. A Proximo spokesperson said that the campaign set 1800 apart from its competitors and followed a year where 1800 saw record growth. According to The Beverage Information Group’€™s Handbook Advance, 1800 grew 17.0% last year.

Internet Awareness

Pop culture meets online technology meets tequila. Brands are going online to socially engage its consumers from Facebook and Twitter presences to promotions and contests.

Beam Global’€™s Hornitos tequila saw so much success from its 2011 inaugural Mash Up promotion’€”a mariachi mash up video featuring Cheap Trick’€”to celebrate Cinco de Mayo that they’€™re doing it again in 2012. ‘€œHornitos is all about creating unique experiences and unexpected adventures,’€ says Amy Weisenbach, senior director of Tequilas at Beam Inc. And a mash up video couldn’€™t fit that definition more perfectly: It’€™s unique and creates an unexpected product upon editing to combine video sources. Hornitos posted its latest contest on its Facebook page and YouTube channel to encourage consumers to enter to win a role in a mash up video with Twisted Sister. But the brand also uses its YouTube channel to post videos for other promotions, like its Choose Your Night’€™s Adventure, designed to take viewers on an interactive experience.

For Sauza, the brand has noticed the importance of emerging media and incorporated it into its programming. In addition to having a strong Facebook presence, Sauza linked up with the event planning blog, Party BluPrints, to add exposure to its Emmy Awards initiative. It partnered with the blog founders to share Margarita-making tips and how to hold at-home Emmy viewing parties.

Don Julio uses its Facebook page and Twitter handle to engage its fans, have them share their thoughts and experiences and learn about the brand. ‘€œTo foster this dialogue, we provide information on our extensive brand history, details and exciting updates on recent events, and consistently ask our fans for their opinions,’€ Sengara says.

Lunazul recently launched a new website that highlights the history of the Beckmann family, which produces the tequila, and shares an interactive display on the production process and the small batch, hand crafted quality behind the brand. The brand focuses on the key attributes of the product. ‘€œWith the ‘€˜Totally Agave. Totally Smooth. Sacrifice Nothing’€™ campaign, we drive home the price-quality ratio that is unmatched in its competitive set,’€ Hafer explains. ‘€œWe support it with relevant retail POS, national print advertising and digital media that are geared toward a demographic that is active and interested in the artisanal qualities of our tequilas.’€

Ready To Serve

The Margarita is considered tequila’€™s most popular cocktail, a fact that the brands aren’€™t about to ignore. Instead they’€™re capitalizing on it, creating products that are ready to drink straight from the bottle. In March 2011, Beam Global bought the Skinnygirl spirits brand, created by natural foods chef, reality TV star and entrepreneur Bethenny Frankel. With the purchase came the Skinnygirl Margarita, a low-calorie, ready-to-drink product. Since then, other brands have released their own light and/or ready-to-drink products.

Jose Cuervo released its Jose Cuervo Authentic Light Margarita with less than 100 calories per serving in April 2011. At the same time, it added a Watermelon Margarita to its ready to drink line. This summer, the brand unveils two new flavors: Jose Cuervo Authentic Grapefruit-Tangerine Margarita and Jose Cuervo Authentic Wild Berry Light Margarita. ‘€œJose Cuervo Authentic Wild Berry Light Margarita packs fewer than 95 calories per serving and is ready to serve using Jose Cuervo Especial Gold, the No. 1-selling Tequila in the world, triple sec and a mix of Strawberry, Blackberry and Blueberry flavors,’€ explains Ami-Lynn Bakshi, Diageo Vice President, Marketing, Jose Cuervo.

The brand’€™s Golden Margarita, crafted with Especial Gold, is undergoing an overhaul on its packaging. To be released this summer, the new sleek look will more closely match that of the Especial line; the frosted glass bottle will be replaced with a clear square design, the Jose Cuervo signature will be embossed on the side, and the 1.75 liter bottle will feature metal bottle caps.

Margaritaville Spirits came out with its own low-calorie spirit in May 2011. The Skinny Margarita Ready-to-Drink Cocktail contains 95 calories and 7.9 carbohydrates in a 4-ounce serving. It’€™s light secret is the addition of agave nectar, which sweetens the drink without the calories. The 1.75 liter bottle retails for $14.99.

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