Agave makes its mark

Tequila’s share of the UK spirits market remains relatively modest compared to the US, but it is an increasingly busy category, with launches and premium brands pulling up both its quick-hit image and commercial performance.

There seems to be a growing appreciation of the provenance of agave cultivation, tequila production and the drink’s place in Mexican tradition and culture.

“UK consumers are fairly removed from this and tend to get swayed by unusual packaging or celebrity endorsements,” says Becky Davies, head of commercial at Ten Locks, the Kingsland Drinks offshoot that has El Tequileño tequila and Banhez mezcal in its portfolio. “Others have a poor perception of tequila from lower quality brands they have tried in the past. That said, there’s still a very clear shift from tequila and mezcal being consumed as a shot or a slammer with salt and lime, to the two market segments gaining respect and admiration.”

Steffin Oghene, El Tequileño’s vice president of marketing and sales, thinks an improvement in the perception of Mexican cuisine in the UK has helped sharpen tequila’s image.

“The only Mexican culture [consumers] were exposed to was Tex-Mex and cheap, low-quality tequila for many years, so it was perceived that Mexican food and tequila were cheap and low quality,” he says.

“Over the past 15 years in the UK this has really changed, with the London bar and restaurant scene really leading the drive to change consumer perception of what Mexico really represents, by showing authentic food offerings and educating consumers on the high quality that tequila can really offer.

“Globally you see tequila now being served in high-end cocktail bars and restaurants in tasting glasses and flutes rather than the traditional shot glass.”

Nick Gillett, managing director of Mangrove, whose portfolio includes El Jimador and Herradura, says 2020 was “a year like no other” for tequila sales as consumers looked to expand their drinking horizons during lockdown. Its off-trade sales were up 28% and mezcal was running at around 1,000% growth from its smaller base.

“Tequila and tonic became a thing,” Gillett says, “particularly as consumers looked to expand their drinking repertoire from gin. The step from gin to tequila is not as challenging on the palate as some other spirits.

“Even a Margarita or Paloma is pretty simple to make at home.

“We’re also seeing quite a trend towards tequila and soda with a squeeze of lime – a lower abv and sugar content compared with a cocktail, but still providing a great flavour profile.” As for what comes next, Gillett says: “Watch out for flavours and finishes. A number of brands are now creating flavoured tequilas or experimenting with different ageing styles.” Cazcabel’s range includes flavoured tequilas such as Coffee, Honey and Coconut which, says marketing manager Lucy Cottrell, provide an approachable way in for many drinkers. Cottrell says retailers need to see the tequila category as varied and versatile, not just a single product.

“Tequila should be treated in the same way as spirits such as whisky,” she says. “It has multiple styles that appeal to different consumers for different uses and occasions. “We would advise retailers to stock an unaged blanco tequila alongside an aged tequila, such as reposado or añejo, and complement this with a tequila liqueur, which can attract and excite new consumers to the category.”

CATEGORY STRENGTH

Storywood tequila founder Michael Ballantyne thinks premium grades of tequila are where the category’s strength lies, but says it should seek broad appeal across a variety of drinking occasions.

“Reposado and añejo tequila in the premium and super-premium categories are certainly the most popular growth categories in the UK,” Ballantyne says.

“Blancos are still very popular, however, and realistically the category is growing across the board, including good-quality tequila liqueurs.”

Storywood’s USP is its wood-ageing in Speyside whisky barrels.

“While we first and foremost talk about sipping our tequilas, the single malt barrel notes also make creating cocktails incredibly fun,” he adds.

“You can either replace the tequila in any classic cocktail to give them a single malt spin, or try replacing the single malt in a whisky cocktail to create something agave forward.”

The trick for tequila will be how to turn short-term growth and excitement around innovation into something of substance and longevity as the market matures. Cheaper flavoured vodkas and gin liqueurs are two examples where drivers of rapid growth have arguably had the effect of dumbing down their parent categories.

Davies at Ten Locks says: “There’s a risk that an influx of poorly made mixtos and diffuser tequilas, made to deliver at a price point some grocers demand, will undermine the true, high quality nature of the spirit.

“This is not good news for tequila, where producers have spent such a long time trying to establish how wonderful the category is, or for producers and retailers who are working to ensure there is enough education about agave spirits out there for consumers.”

But she adds: “It can also be easy to fall into a ‘100% agave is best’ mindset when in fact, a perfectly crafted and honed mixto can taste better than a 100% agave tequila. There’s room for all, and we shouldn’t overlook that mixto has a clear place in the supermarket.

“The challenge to the industry, as the category grows, is to highlight this and do it justice.” Tequila could perhaps do with the kind of serious but accessible approach that some retailers have taken to single malt Scotch education in the past few years, or the recent attempt by The Whisky Exchange to lead the sector in demystifying the many nuances of rum.

“The task to retailers is to get behind brands that truly represent the diversity of the category and support those which have the ability to engage consumers in authentic, credible stories,” says Davies at Ten Locks.

“Ensuring offerings are clearly signposted with cues that help consumers understand what’s on off er at both ends of the price ladder will aid the decision-making process, while backing brands of quality will do the longer-term job of locking consumers in.” 

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