The Spirits of Mexico

In beverage alcohol as in nearly every other product category in America today, Mexican is caliente, especially tequila.

“It’s just on fire right now,” said Barbara Liss, brand manager for Sauza and El Tesoro tequilas, Beam Global Spirits & Wine. “People are starting to experience tequila in more than just the Margarita.”


“Tequila is growing overall, and the category seems to be growing at both the premium and superpremium end,” agreed Lori Logan, marketing manager, Barton Brands, which markets Montezuma Tequila. “It’s following in the footsteps of premium and superpremium vodkas.”


Indeed, the tequila category showed significant growth in 2006, up 10.2% nationally, to just under 10 million 9-liter cases, according to the latest statistics from the Adams Beverage Group. Every leading brand saw sales rise last year, led by Diageo’s Jose Cuervo, the perennial category leader with more than 38% of total category sales. Cuervo gained more than 100,000 9-liter cases to almost 3.8 million cases, up 3.0%. Sauza’s tequila lineup, from Beam Global Spirits & Wine, increased sales by 3.7% to just under 1.36 million cases, while Patron’s stellar performance (up an astounding 74.8% to more than 1 million cases) underlined the sales surge among superpremium brands. Other double-digit percentage gainers include the Skyy Spirits 1800 portfolio (up 10.1%); Margaritaville Silver and Blanco tequilas, from Luxco, which increased by 18.6% to 255,000 9-liter cases (Luxco also handles Juarez tequilas, which gained 5.9% to 450,000 cases); and Brown-Forman’s Pepe Lopez and El Jimador tequilas, with the latter gaining 18.8% in 2006 to 190,000 9-liter cases, and the former increasing sales by 34.6% to 144,000 9-liter cases.

The ongoing trends in the category include substantial growth at the high end, as well as the continued popularity at the premium and even value price tiers, and the emergence of flavored tequilas. Adding to all this activity in the category is the increasing number of new tequilas, especially luxury brands, being launched in the U.S.


The Jose Cuervo portfolio actually encompasses all of these trends. The high-volume brands – Cuervo Especial and Clasico – continue to power the category. Still, Cuervo’s management is intent on “premiumization of our brand,” said Anamaria Cesena, Cuervo’s senior brand development manager, “as well as its versatility. We want to teach people that tequila is not only for shots and Margaritas. We want to share some new recipes and put a twist on old favorites. I think that’s key.”

This month, Jose Cuervo is
debuting its 2007 version
of the ultra-premium
Reserva de la Familia, an
añejo tequila made from
hand-selected, 100% pure
blue agavé grown in the
Cuervo estate’s richest volcanic soils.

One recent example is last year’s launch of the superpremium Jose Cuervo Black Medallion, which is a blend of quality tequilas aged for a minimum of 12 months in new charred oak barrels. The square bottle is embossed with the family crest, Funada en 1795, and Hechoen Mexico as a reference to the family heritage. It retails for$19.99 to $20.99 per 750 ml bottle. The launch was supported by a fully integrated marketing effort that included promotions and special events, public relations, merchandising, and sampling (where legal) as well as a new advertising campaign. Diageo also launched Jose Cuervo Flavored Tequilas last year (see sidebar).

At the ultra-premium end, Cuervo boasts Reserva de la Familia, and the company just announced the availability of its 2007 edition beginning this month. Familia is an añejo tequila made from hand-selected, 100% pure blue agavé grown in the Cuervo estate’s richest volcanic soils. Aged in new French and American charred oak barrels, Reserva de la Familia has a full, mellow taste that combines floral, agavé, vanilla, nut and cognac-like flavors, the company says. It is typically sipped in a brandy snifter either straight or on the rocks. The luxury tequila comes in an artistically designed wooden box. This year, the design on the handcrafted box is the work of renowned Mexican artist Pedro Friedeberg. The limited edition Familia retails for about $100 per 750 ml, depending on the market.

Diageo also imports the Don Julio Tequila portfolio, which includes a Blanco, Reposado, Añejo, 1942 and Real. The brand recently announced that it is sponsoring a traveling art exhibition showcasing works by innovative Mexican and Mexican-American artists, called, “Nuevo Arte: Coleccion Tequila Don Julio.”


Sauza is another brand with a portfolio that spans the spectrum of premium to superpremium expressions. Beginning with Sauza Gold and Blanco, the portfolio includes Hacienda (a reposado), Sauza Conmemorativo, aged 18 months in oak bourbon casks; Hornitos, a 100% blue agavé tequila; and three different expressions of Tres Generaciones: Plata, Reposado and Tres Añejo (about $75 and higher at retail).

Recently purchased by Brown-Forman, the superpremium Herradura tequila brand is offering this gift set.

Brand manager Barbara Liss noted that tequila education is an important element of the marketing mix. Common questions people ask are, “With all these different types of tequila, what do the designations mean? How do I drink them? When do I drink them?” Beam Global Spirits & Wine uses brand ambassadors to spread the word through tastings in popular restaurants.

Beam also handles El Tesoro, and this year it celebrates its 70th anniversary. “It’s a great opportunity to engage with our consumers and give them something special back,” said Liss. Off-premise, many of the anniversary materials will arrive in stores this month and next. “What we’re really excited about is focusing on that whole build-up to Cinco de Mayo,” she noted. “It’s not just one day. It’s really getting into the market, both on- and off-premise, and owning that build-up, whether it’s educating the trade, recipe contests, salsa dancing, mariachi bands or Sauza buses doing pub crawls, community focus, being involved with communities where we can.”

Launching this spring is Sauza Cien Anos Blanco, joining the current Reposado expression. “It’s a very targeted brand, and very familiar for the Mexican consumer,” said Liss. “We like to say we’re bringing the tequila from home, home.”

A big summer promotion lies ahead with DeKuyper. “It’s all about adding some sizzle to your Margarita. There is nothing more popular than the flavored Margarita.” The program will include 50 ml bottles of Pucker flavors with a bottle of Sauza. “It’s really focusing on different ways to experience the Margarita, and convenience for the consumer.”


Consolidation, of course, continues.

Sauza, the second best-selling portfolio of tequilas in the U.S., is offering this Hornitos gift set highlighting four different DeKuyper
Pucker flavors for mixing with Margaritas.

Last August, Brown-Forman Corp. agreed to acquire assets of the Mexican tequila company Grupo Industrial Herradura SA de CV for $876 million. The deal brought Brown-Forman the renowned Herradura and El Jimador tequila brands, as well as the New Mix tequilabased ready-to-drink brand.

The purchase expands Brown-Forman’s tequila holdings, which already include Pepe Lopez, a mid-priced brand that retails for about $15, and Don Eduardo, a superpremium priced at about $35. Herradura carries a suggested retail price of about $40; El Jimador $20.

Second-quarter marketing programming for Don Eduardo will be focused on “Mean Margaritas and the Mean Martini,” according to spokesperson Sean Wachsman. “Tiered sampling trees will be used to serve flights of Margaritas and Martinis. Local teams can also personalize tableside service with ‘keep the shaker’ programs where consumers will be able to shake their margarita at the table and take the shaker home.”

El Jimador signed a sponsorship deal in November to be the official tequila of the first ever Billboard Regional Mexican Music Summit set for November 13-14 at the Beverly Hilton Hotel in Los Angeles. Sister brand Casa Herradura is using International marketing manager Valdemar Cantu as a brand ambassador to speak to consumers around the country about “the real taste of Mexico,” the different types of tequilas and how to properly enjoy them.

The prestigious Herradura brand includes among its offerings the ultrapremium Herradura Seleccion Suprema, first released to commemorate the brand’s 125th anniversary. Aged a minimum of four years in small white oak barrels, and with a production of fewer than 2,000 bottles annually, Suprema sells for about $250 per 750 ml bottle.


Indeed, it seems that the flow of new super- and ultrapremium tequilas rolls on. One of the most successful high-end tequilas is Patron, the third best-selling tequila in the U.S. Matt Carroll, vice president of marketing for the Patron Spirits Co., said the company “wants to stay on the cutting edge as far as advertising. We’re working with magazines and the Internet, and we’ve got sweepstakes tied into that. We market toward the trendsetters, and hopefully we can get a lot of consumers involved in some great events.”

Jimador, now a part of the Brown-Forman portfolio,
is featuring this outdoor advertising.

The year just ended saw Patron add a new advertising agency, The Richards Group in Dallas, and launch new print, out-of-home and TV campaigns. The concept consists of a series of debates with the tagline, “Some Perfection is Debatable.”

Patron’s “Simply Perfect” campaign “eavesdrops” on conversations about hotly contested but humorous topical issues. Print ads examine “thought-provoking topics relevant to readers” of the various magazines in which they appear. Each ad contains copy on one side of the page that reads: “Some perfection is debatable,” and on the other side, under an image of a Patrón Tequila bottle, the copy states: “Some is not.”

The company announced the debut of an aged tequila called Patron Gran Burdeos, Carroll said. “Burdeos in Spanish means Bordeaux. We’ve taken our Gran Platinum (introduced in 2006 at $199 a bottle) and laid it in Bordeaux barrels from France and aged it for over a year.” It will be released in March through high-end retailers. With an initial distribution of just 3,000 bottles, the retail price will be $399.

Montezuma, from Barton Brands, is featuring this
festive off-premise case card.

Skyy Spirits has likewise debuted a triple-digit-priced expression to its Gran Centenario portfolio. This past November, Skyy launched Gran Centenario Leyenda in the U.S., the first of the company’s tequilas to be known as Extra Añejo – aged an average of four years in French limousin oak barrels and made with only 100% blue agavé. (This differs from typical añejo tequila which is aged for a minimum of 18 months in French limousin oak casks.) Extra Añejo is the newest classification of tequila granted by The Tequila Regulatory Council (El Consejo Regulador del Tequila, A.C.). Gran Centenario Leyenda is among the first tequilas to be given this classification.

Available in limited supply nationwide, each bottle of Gran Centenario Leyenda is individually numbered and packaged in a luxurious burlap and leather presentation box that pays tribute to the brand’s Mexican origins. It retails for approximately $249.99 nationwide, and is available at highend outlets. The rest of the Gran Centenario portfolio includes Plata, Reposado and Añejo versions.

The overall marketing program for Gran Centenario is designed to build awareness for the brand through sampling at focused, high-end consumer events in key U.S. markets.

Skyy also imports the portfolio of 1800 Tequila, made with 100% blue agavé. The lineup includes a Silver, a Reposado (aged six months), an Añejo (aged three years in French oak), as well as a the most recent addition, 1800 Colección, a handcrafted product made from specially selected tequilas and aged in charred French oak barrels.


Expectations “are very high” for the new year, said Gonzalo De La Pezuela, vice president and group marketing director for Bacardi USA’s House of Cazadores and Corzo tequilas. “The growth of Cazadores [227,000 9-liter cases in 2006] is centered around the authenticity of the product and the quality credentials. This is a brand that has never done mass advertising in this marketplace, just word-of-mouth advocacy from influencers, people who are tequila connoisseurs.”

Gran Patron Platinum is part of the high-end Patron tequila family, which saw sales increase to
more than 1 million 9-liter cases last year.

Throughout 2006 the company worked to leverage that authenticity largely on-premise. A major promotion extending to offpremise was Chicas Cazadores, a six-month tour that saw brand ambassadors visit both on- and off-premise establishments. “It was a really wonderful experience for people to meet our staff from Mexico,” said De La Pezuela.

For both Cazadores and Corzo, Bacardi has implemented a new ambassador program. As for distribution, De La Pezuela noted that “some of our fastest-growing markets are on the East Coast, and we expect that to continue.”

Cazadores tequila is available in three expressions: Blanco (bottled after distillation), Reposado (aged between 2 to 11 months) and Añejo (aged no less than 12 months). They retail for $26.99 to $39.99 per 750 ml bottle.

Bacardi’s Corzo is a superpremium tequila that retails for $49.99 for Reposado; $44.99 for Blanco; and $59.99 for Añejo. The brand is marketed in “major cities” like Los Angeles and New York, said De La Pezuela. “It’s really about putting the brand in front of people who are influencers and, a lot like Cazadores, doing this through word-of-mouth advocacy.”

Another tequila with great expectations is Partida, which last fall named Mike Jaeger as its new president and chief operating officer. He had previously served as president of Vincor International’s U.S. wine business and, before that, a group president at Constellation Brands.

Jaeger’s focus, the company said, is to work closely with distributors “to leverage Partida’s growing brand awareness for expanded distribution and sell-through.”

Partida Tequila, an estate-grown premium tequila made from 100% blue agavé in Amatitan, part of Mexico’s historic Tequila region, produces three products: Blanco (not aged), Reposado (aged six months) and Añejo (aged 18 months). The brand is distributed in Arizona, California, Colorado, Connecticut, Florida, Indiana, Illinois, Nevada, New Jersey, New York and Texas as well as in Mexico. Expansion is scheduled to continue in the U.S. and begin in the UK this year. The ultra-premium Partida Elegante, aged three years, is due to be launched in the U.S. in the third quarter of this year.

Superpremium Cazadores tequila, imported by Bacardi USA, is highlighting
this gift box at retail

Corazon Tequila, from Sidney Frank Importing, is another superpremium-priced, prestige collection of tequilas released in the past few years. The brand, made from 100% blue agavé, boasts a Blanco (at about $50), a Reposado (about $60), aged up to a year in oak barrels, and an Añejo (about $70), and up to two years in oak.

Another exquisitely bottled, ultra-premium release, the newest extension of the Cabo Wabo tequila portfolio, is Cabo Uno. Cabo Wabo is made from 100% Blue Weber agavé and comes in four different versions: Reposado, Blanco, Añejo and now the new Uno. Blue Weber agavé from specially selected plots form the basis of Uno. The tequila is then aged for 38 months in small oak barrels.

And then there’s Diamante del Cielo Añejo, a limited release 100% agavé tequila from Blavod Extreme Spirits USA; and the recently released addition to the line of Chinaco superpremium tequilas (Preiss Imports), Chinaco Negro Extra Añejo, aged five years, with an extremely limited availability (600 bottles); Dos Lunas Silver and Reposado, also introduced late last year, and the latest entry to cross our desk, Siembra Azul (Suro International Importers), a premium small batch, 100% blue agavé tequila that currently comes in Blanco ($34 suggested retail) and Reposado ($39 suggested retail) versions. The new brand is double-distilled and kosher; the Añejo expression should be available by the fall.

So, from premium to superpremium to ultra-premium, tequila growth trends appear positive for the coming years.


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