By all accounts, the tequila market is booming. Rebranding has been focusing on taking tequila out of the “what the heck did I do last night?” category and placing it into a refined and trendy class of liquor.
The greatest increase in the tequila market has certainly been in the high-end category, though there are a lot of hoops and laws for a distiller to jump through to even have its product labeled as tequila. Aficionados are coming out of the woodwork, and high-end tequila is being swirled, sniffed and consumed like a fine wine.
The top five distillers by market share are likely very different from just a few years ago, as new companies have aggressively entered the market. In related news, the urban legend about the worm and tequila is finally starting to be refuted.
Jose Cuervo is the big heavy hitter when it comes to tequila. It’s easy to get in on the ground floor when you are the creator, no? In 1795, the man who gave the company its name created the first tequila on Mexican land granted to him by the King of Spain, according to the Cuervo website.
Today, Jose Cuervo is one of the most recognized distillers of tequila, as well as a renowned name in the industry of hard liquor. Mexican law keeps tequila manufacturing within tight boundaries in an attempt to stave off knock-offs that might sell a cheaper tequila, thus flooding the markets with low-quality product. It is just like how true Champagne can only come from a certain region of France. Everything else is sparkling wine.
Jose Cuervo isn’t just an everyman’s tequila, either, though they do strive to create a quality product that all can enjoy. The distiller offers distinct bottles of tequila that range from $120 to $2,000.
Despite being the top dog of the tequila pile, Cuervo’s market shares have been falling. For 2010, Jose Cuervo’s market share was slightly more than 30%, which is still quite a big slice. Estimated 2011 data showed a drop to just over 28%.
Patrón Spirits has gained a large share of the tequila market in recent years, thanks largely in part to social awareness and branding; it seems to be the hot item that lends instant status. Mentioned in both country and rap songs, Patrón tequila would appear to have a way of bringing polar opposites together.
As of 2010 and estimated for 2011, Patrón Spirits enjoyed over 14% of the market, which was more than double their market share five years prior. Patrón strives to be on the cutting edge of hip, with beautiful styling such as their hand-numbered bottles, as well as producing high-end tequila.
The company does its best to get this image, boasting of a hacienda as its distillery and of developing a waste treatment process that does not pollute the environment, according to the Patrón Spirits website. They even wash their bottles in tequila prior to filling them with better tequila.
While being overtaken by Patrón in recent years, Sauza also showed considerable growth with broadening its offerings by embracing the demand for pure tequila. The company has a much funkier and more approachable branding than Patrón, standing out as a quality brand that’s not just for the rich and infamous. A quirky ad campaign filled with sexual innuendoes doesn’t hurt, either.
In 2010, the market share of Sauza were just over 13%, and estimated 2011 figures put the company’s share of the tequila market at just under 14%. While Sauza’s market share is near that of Patrón’s, their growth rate has obviously not been as sharp.
The sales of 1800 have jumped considerably over the past few years, especially with the fancy bottle and an appeal to a younger crowd. Though the company is no Johnny-come-lately, they certainly focus on a younger demographic. For instance, the company is on its fourth release of bottles commissioned by current artists that have a decidedly youthful bent.
In 2010, 1800’s market share was almost 6%. Estimated percentages for 2011 boast a market share of 6.5%, which shows just a slight increase in sales.
Juarez comes in at number five, though posting impressive sales increases from 2010 to 2011. Their website claims that they are the fourth best-selling tequila in the U.S. All of Juarez’s parent company’s alcohol offerings – and they are extensive – have a retro feel and look to their branding that is much more accessible to the average consumer.
In 2010, Juarez’s market share was 4.5 %, and estimated 2011 figures show growth to 4.7%. Not bad for a tequila that is marketed as a Champagne-quality product on a beer-priced budget.
All told, the top five tequilas in terms of market shares dominate the industry with over 65% of the market. Those numbers did fall from 68.6% in 2010 to 67.8% in 2011, however. As consumers call for high-quality tequila at both ends of the price spectrum, new brands have their chance to jump into the market.