Interview: What’s Driving Premium Tequila?

North of the border, the premium tequila category continues to expand. Austin, Texas’ Tequila 512, launched in 2012, experienced 60% growth in 2015, followed by about 70% growth in 2016.

The future for the brand appears bright. Tequila 512 secured $1.5 million-plus in growth funding from private investors last year to add team members, boost advertising and expand into new space. The spirit also recently rebranded. I spoke to Tequila 512 founder Scott Willis to discuss the burgeoning brand and overall tequila category.

Beverage Dynamics: What do modern consumers want from premium tequila?
Scott Willis: They want accessibility from a taste and price standpoint, because we think tequila is no longer just for special occasions. It should be for any time, including around the pool or tailgating.

That’s why we aimed for that $22-26 price point for the blanco, and up to $32-$36 for the anejo. We think that’s where people are comfortable paying for a better product to drink any time, but without breaking the bank.

Scott Willis

Tequila 512 founder Scott Willis

BD: How are consumers drinking premium tequila?
SW: We talk to people all the time who never sipped it before, but have recently started. The consumer is more and more educated about tequila. And we see a lot of people using it in simple craft cocktails.

We see a lot of tequila over ice with ginger beer. Or tequila with blood orange and soda. The idea is a simple cocktail with three-to-four ingredients, which you can bring to a house party and easily make for everybody that tastes delicious.

BD: How do you sell to someone whose last experience was taking too many tequila shots in college?
SW: The first thing we do is educate people about that product they had before. We teach them that the first thing you look for with premium tequila is 100% blue agave. And that what they had was about 49% sugar, with food coloring added. Then they say, ‘Oh, ok, so I was basically drinking a cup of sugar with alcohol, and that’s why I reacted the way I did’.

In comparison what’s in our bottle is just water and tequila. Of course, the distillation process is much more artistic than just that, but that’s how pure premium tequila really is.

Then we teach them what to look for in terms of flavor profile. These days everyone knows wine and terroir. So we tell people to think about tequila that way. How highlands and lowlands produce different tequilas. How a lowlands tequila like ours is going to be a bit more spicy than sweet (Though you do get that sweetness after sipping on it for a while). How you should look for spiciness or earthiness in tequila flavors. Once people get into that terroir mindset, they better understand tequila.

BD: How can premium tequila stand out on shelves?
SW: When we undertook our rebranding, it was an extensive, 10-month process. We set out to produce something that would be unlike anything else on the shelf. We didn’t want the traditional photo of an agave on the brand. That’s an old-world standard. We didn’t want to do that, but also wanted to do something that reflected Mexico.

So the yellow stripe that runs down our bottle is bright and looks hand-painted. It’s inspired by the paintings you see on the walls when you walk through Tequila, Mexico. We have a slender bottle, unlike traditional shorter, squatter bottles, and that was a good canvas for this brand design.

BD: What’s been your experience educating retailers?
SW: It’s been great. A lot of retail stores try lots of products and they’re getting more interested in tequila. At the store down the road from me, the owner said that 30 years ago his father had just five tequilas on the shelf. Now he has a whole shelf just for tequila and a section for mezcal.

Consumers are more educated today about tequila. And in response, the retailers and getting more educated themselves.

Kyle Swartz is managing editor of Beverage Dynamics. Reach him at kswartz@epgmediallc.com or on Twitter @kswartzz. Read his recent piece 7 Factors Driving Spirits Sales In 2017.

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