Mexican Magic


The histories of the United States and Mexico have been inextricably entwined since the early days of both countries. In the 19th century there were land and border issues that were ultimately resolved with the transfer of large portions of land in what are now the states of Texas, Arizona, California and New Mexico. But regardless of where the border lay, the cultural influence of Mexico on California and the Southwest has been undeniable. The region’s largest and most charming cities, Los Angeles, San Francisco, San Diego, San Antonio and Santa Fe, to name a few, reflect that influence to this day. Mexican-inspired food has become one of the most popular cuisines in American restaurants and has become ubiquitous on the menus of America’s family-style chain restaurants. And the influence carries over into the beverage portion of the menu as well. According to polls of bar and restaurant owners, the Margarita has been the most popular cocktail in America for well over a decade.

Much like the way Mexican cuisine has evolved as chefs have experimented with the basic idea, so has the Margarita. Once strictly lime-flavored, there are now recipes that call for all kinds of fruit variations (mango, strawberry, tangerine, cranberry, et al.). Instead of generic triple sec, many trade-up Margaritas use Grand Marnier, Cointreau or another orange-flavored liqueur to further vary the taste profile. The one ingredient that hasn’t changed is the primary one — tequila.

After dramatically outperforming the rest of the distilled spirits industry for more than a decade, tequila suffered a setback in 2000 and 2001 due to a shortage of agave. This in turn caused a dramatic increase in production costs resulting in higher prices. Unable to secure a supply of product at a bargain price, a number of lower-end brands dropped out of the market as a result. The tequila supply situation seems to have stabilized, and the category appears to be back on the growth track.

But even with the temporary setbacks the category has experienced, the growth pattern over the last few years has been impressive. According to Adams Handbook Advance 2004, last year total tequila consumption was up 6.4% nationally. On a relative growth basis, no spirit category can rival the performance of tequila over the past 15 years. Total consumption, which was only 4.4 million 9-liter cases in 1990, had risen to 5.9 million cases in 1997 and reached its highest point ever with more than 7.6 million cases in 2003.


SAUZASauza (Allied Domecq), which upped sales by 100,000 cases nationally last year, is featuring this co-pack in the spring.

“Tequila over the past year has made a tremendous comeback,” said Jose Chacon, senior brand manager for Allied Domecq’s Sauza family of tequilas. “We’re seeing growth across the board,” he said. “That’s been one of the positive things about our business. We have a pretty well-balanced portfolio with offerings in premium, superpremium and ultrapremium and while the bulk of our business is still in premium, we’re seeing tremendous growth across the board on all our items. The Sauza brand has grown primarily by one key factor. We have a very strong brand proposition for consumers. Some players chose to play with the quality of the product; we chose to limit the global expansion of the brand. Quality is still paramount.

“The other piece that’s helping us and differentiates us from other players out there,” he continued, “is that since we have a full family of tequilas, we have a lot of ways to bring people into the franchise. Consumers want to explore and they want to experiment, but they want to do it under a safer environment. So exploration within one brand has been very strong over the last few years.

“Third, we are supporting the business tremendously. We say, ‘We are a tequila and we’re proud to be a tequila.’ We launched a global campaign last year under the umbrella ‘Get Lost.’ We’re doing a lot of things on-premise and off-premise and it’s really working. The numbers that we’re seeing on the business support that.”

According to numbers compiled by Adams Beverage Group researchers, the Sauza brand family remained second in the category by a wide margin and picked up 100,000 cases in volume nationally (+9.9%) to finish the year at the 1.1 million case mark.

CuervoEspecialThe line of Jose Cuervo tequilas (Diageo) continues to dominate the category.

While Sauza and a number of other brands have shown strong and consistent growth, the category leader remains Diago’s powerhouse Jose Cuervo brand. In 2003 Cuervo, which was virtually unaffected by the category’s problems in 2001 and 2002, had its eighth consecutive year of increased volume. With sales of more than 3.2 million cases nationally (+1.9%), Cuervo accounts for around 43% of the category’s overall volume.

Of the top ten tequila brands, only two, Montezuma (#3) and Rio Grande (#10) failed to show growth last year. Both, however, had experienced huge volume increases in 2002, and their respective ­1.5% and ­4.3% declines still put them far ahead of their consumption figures for 2001.

For the rest of the category, growth nationally in 2003 ranged from modest for Juarez (+1.3%) to impressive for 1800 Reposado (+7.3%) to phenomenal for Patron (+51.9%), Margaritaville (+22.6%) and Cazadores (+41.7%).

Cinco Gold

Like most brands in the category Jose Cuervo has traditionally tied its Mexican heritage to the Cinco de Mayo holiday, one of Mexico’s officially celebrated independence days. This year’s effort is an integrated promotion under the banner, “Grab For The Gold,” scheduled to kick off in April and to run through June. Brand marketers are using a mix of web, print and radio advertising and displays in off-premise outlets. Consumers who purchase special bottles of Jose Cuervo Especial during the “Cuervo de Mayo” holiday timeframe will receive $5 off CuervoNation merchandise, including items such as flags, volleyballs, coolers, shot glasses, foldable chairs, visors, poker sets, T-shirts, available exclusively on In states where monetary incentives to consumers are not allowed, alternate neckers and shelf pads will simply direct consumers to the website.

Stand Out From The Crowd

Two_Fingers_BottlesTwo Fingers Tequila (Heaven Hill Distilleries) recently debuted new labels.

As the tequila category has grown, the competition among suppliers within the category has grown even more intense. As more and more brands crowd each other for space on retailers’ shelves packaging takes on even more importance than usual. An attempt to “enhance shelf presence” was among the reasons given for the recent package redesign of Two Fingers Tequila. While keeping the brand’s familiar opaque black bottle, the new design uses different colored foils to identify the silver and gold tequilas and adds a number of Mexican motifs around the traditional brand logotype. “As a long time category leader with much equity built up in the name, logo and bottle, we believe the label upgrade will help keep Two Fingers Tequila visible and in demand among today’s consumers,” noted Susan Wahl marketing manager for brand importer Heaven Hill Distilleries. A number of point-of-sale materials are available to support the redesign including case cards, floor bins and shelf talkers all of which show the new packaging and carry the tagline, “Do It With Two Fingers.” The relaunch, which should be on retail shelves by April, is also being supported with Margarita salt or shot glass on packs, where legal.

Not Just Tequila

While the spirit most associated with Mexico in the minds of most Americans is undoubtedly tequila, there are other products as well. Although Mexico is not thought of as a wine-drinking or wine-producing nation, early Spanish settlers did attempt to bring their viticultural tradition with them. The most visible product of that tradition in Mexico are the brandies produced by Allied Domecq. Presidente is the most prominent of these products in the U.S. with annual sales in excess of 200,000 cases. It has a strong base of consumers in the Hispanic communities, particularly among Mexican-Americans. In fact, in Mexico, where it is an enormous brand, it reportedly outsells tequila. Allied Domecq also brings in Don Pedro and Azteca de Oro brandies, which had combined sales of about 75,000 9-liter cases in 2003.

el_tesoro_plat_hiresEl Tesoro (Jim Beam Brands) is one of a host of increasingly popular high-end tequilas.

The most well-known non-tequila Mexican spirit brand is undoubtedly Kahlúa. Since the late ’90s the brand’s momentum has somewhat stalled, and it suffered a third consecutive year of decline in 2003 with a 3.3% loss in volume. Still, it remains a major distilled spirits brand with sales of approximately 1.3 million 9-liter cases last year. Other coffee-flavored Mexican brands like Kamora and Copa de Oro that have tried to mine the same consumer base have not fared any better than the leader. All retain a loyal following among their traditional consumers but have not managed to make inroads with new audiences.

Allied Domecq has taken numerous steps to offset the brand’s decline including updating the look and content of Kahlúa’s website to give it a hipper and more contemporary feel. At the same time, traditional successes for the brand are also receiving a fresh approach. A recent example was Kahlúa’s Valentine’s Day promotion with Russell Stover chocolates. In addition to offering coupons for both brands, the promotion offered a recipe for a Kahlúa White Russian and suggested using a single Russell Stover chocolate as a Valentine garnish. “Research has shown that both Kahlúa and Russell Stover share the same target consumer–women and men, ages 30-44, who are looking to unleash their true energy and playful sides,” explained Adrienne Nagy, marketing manager for Kahlúa when announcing the promotion.

Newer to the market than the coffee-flavored Mexican liqueurs is Tequila Rose, from McCormick Distilling. The 34 proof Tequila Rose is a strawberry-flavored cream liqueur mixed with tequila, giving consumers a rather unique alternative when choosing a Mexican spirit.

Still, the ability to appeal to a diverse audience has always been part of the success strategy of the Kahlúa brand, and with that in mind retailers should make it and other Mexican liqueurs part of any Mexican-themed Cinco de Mayo promotions they organize. The same can be said for Mexican brandies. Together with tequila, Mexican beer and appropriate snack foods, all of these Mexican spirits can help retailers turn this exciting holiday into a profitable fiesta. *

Leading Brands of Tequila

(Thousands of 9-Liter Cases)

Brand Supplier 2002


% Change
Jose Cuervo Diageo 3,180



Sauza Allied Domecq Spirits USA 1,010



Montezuma Tequila Constellation Brands 603



Juarez David Sherman 395



1800 Reposado Skyy Spirits USA 286



Patron The Patron Spirits Company 135



Margaritaville David Sherman 155



Cazadores Bacardi USA 120



Rio Grande Tequila McCormick Distilling 161



Total Leading Brands 6,045



Others 1,141



Total Tequila 7,186



(p) Preliminary. Source: Adams Beverage Group Database

Clip-And-Post Margarita Recipes

Basic Margarita

  • 1 1/2 oz. tequila
  • 3/4 oz. fresh lime juice
  • 1/2 oz. triple sec or Cointreau

Shake ingredients with ice. Strain into chilled, salt-rimmed cocktail glass.

Frozen Margarita

  • 1 1/2 oz. tequila
  • 3/4 oz. fresh lime juice
  • 1/2 oz. triple sec or Cointreau

Combine all ingredients in blender with one cup crushed ice. Process until slushy (about five seconds).

Blue Margarita

  • 1 1/2 oz. tequila
  • 1 oz. Rose’s lime juice
  • 1/2 oz. blue curacao

Follow instructions for basic or frozen margarita.

Strawberry Margarita

  • 1 1/2 oz. tequila
  • 1 oz. Rose’s lime juice
  • 1/2 oz. strawberry liqueur
  • 4 large strawberries (fresh or frozen)

Combine all ingredients in blender with one cup crushed ice. Process until slushy (about five seconds).

Melon Margarita

1 oz. tequila

1 oz. Midori Melon Liqueur

1 oz. Rose’s lime juice

Follow instructions for basic or frozen margarita.

Orange Margarita

  • 1 oz. tequila
  • 1/2 oz. orange vodka
  • 1/2 oz. triple sec
  • 1 1/2 oz. orange juice

Shake with ice. Strain into chilled cocktail glass (sugar rim optional). Garnish with orange slice.

All-In-One Margarita


Tarantula RTD

Ready-to-drink cocktails, in many categories, have been a popular alternative for consumers for years, and ready-to-serve Margaritas are no exception. Naturally, the most popular is Authentic Jose Cuervo Margaritas, made with Jose Cuervo Gold tequila. The brand recently debuted an updated label, which features imagery of the Mexican countryside as well as a back label that describes the history of the Margarita. Another version of RTD Maragritas comes from McCormick Distilling, which introduced Tarantula Azul Ready-To-Drink Margaritas last year. Joining it are four additional Margarita flavors: Mango, Strawberry, Melon and Berry. The drinks, which are 5.5% ABV, are available in four-packs of 200 ml bottles.


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