Tequila Defies Premiumization Cooling

Tequila is defying overall premiumization cooling, Drizly says, with reposado making gains. And there are new trends hitting the tequila category, from barrel aging to additive-free options.

Tequila has steadily gained share on Drizly over the last five years, growing from 13% of the liquor category in 2019 to 19% in 2023 year-to-date. Even as the premiumization trend has cooled, tequila remains red-hot as consumers embrace the spirit as a year-round choice and diversify their purchasing beyond the silver subcategory into the higher-end realms of Reposado and Añejo.

IWSR Drinks Market Analysis has also tracked impressive growth for the category. The compound annual growth rate (CAGR) for tequila grew four percent from 2017 to 2022, and the growth rate for tequila in the premium-and-up price tier reached 21%. IWSR predicts that the CAGR for higher-end tequila will increase by an additional 13% between 2022 and 2027.

Younger consumers of legal drinking age over-index on tequila sales relative to overall share on Drizly. Gen Z accounts for 7% share of tequila sales yet only 4% of overall sales on the platform, and millennials account for 51% share of tequila sales but only 45% of total sales on Drizly.

Top 20 Tequila SKUs on Drizly YTD

  1. Casamigos Blanco
  2. Clase Azul Reposado
  3. Espolòn Tequila Blanco
  4. Casamigos Reposado
  5. Don Julio 1942, Añejo
  6. PATRÓN Silver
  7. Jose Cuervo Especial Silver
  8. Don Julio Blanco
  9. 1800 Blanco
  10. Espolòn Tequila Reposado
  11. Don Julio Reposado
  12. Teremana Tequila Blanco
  13. Jose Cuervo Especial Gold
  14. Tequila Casa Dragones Blanco
  15. Teremana Tequila Reposado
  16. Casamigos Añejo
  17. Milagro Silver
  18. Don Julio Añejo
  19. Hornitos Plata Tequila, Silver
  20. Don Julio Rosado Tequila Reposado

The top three SKUs held their positions from the previous year, while Don Julio 1942 moved up from the No. 4 spot to No. 5. Celebrity-owned Teremana Blanco slipped from the 10th position to No. 12. New on the list this year is Don Julio Rosado, a pink tequila finished in Port wine casks.

Reposado Stealing Share from Silver

Silver/Blanco has long been the top-selling tequila subcategory on Drizly, but its share has decreased over the last four years. In 2021, silver/blanco accounted for 57 percent share of the tequila category and it held 12 positions among the top 20 tequila SKUs. However, silver/Blanco’s share is now 50 percent, and the subcategory holds 10 of the top 20 positions.

Meanwhile, reposado is moving up in the ranks. In 2021, it accounted for 23 percent of tequila share and held four spots among Drizly’s top 20 SKUs. The subcategory now holds 30 percent share in 2023 year-to-date and has six entries in the top 20—including the No. 2 spot.

Nielsen IQ data shows that dollar sales for reposado grew 14 percent in the 52 weeks ending July 15, 2023. The añejo category grew 4.5 percent, while silver/blanco tequila gained nearly six percent, and gold tequila sales increased two percent.

More so than for any other category, celebrity brands are driving teuila sales. Celebrity-owned brands have become a major driver of the category,” Liz Paquette, head of consumer insights for Drizly, says, “with brands like Casamigos and Teremana making up several of the top 20 SKUs.”

The premiumization trend has slowed during the past 12 months, tequila’s average unit price on Drizly has increased from $39.32 in 2019 to $48.55 in 2023 year-to-date.

“The growth of more premium subcategories within tequila has helped drive this trend,” says Paquette, “especially with the growing popularity of reposado in recent years.”

Añejo has seen significant gains in average unit price over time, from $86.62 in 2019 to $98.61 in 2023. Likewise, reposado’s average unit price rose from $44.50 in 2019 to $61.43 in 2023. The average for silver/Blanco tequila in 2023 year-to-date is $39.26, while gold tequila is $25.96 and flavored tequila is $32.83.

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