Tequila set to flourish in the US On Premise, continuing its rapid growth

Tequila is one of the most popular Spirits globally, but North America is where it really demands attention. Its popularity has grown significantly in recent years, with the category evolving to meet different tastes and preferences. Ultimately this growth in popularity has led to greater pressure on production, leading to the potential of shortages in the past. However, for the most part, production issues have subsided – clearing the way for Tequila to continue its growth in the On Premise.

From a sales perspective, CGA’s On Premise Measurement service (OPM) provides valuable insights into the current position of Tequila in the US, and a greater understanding of whether this growth will continue in the On Premise. OPM is the only fully projected, extensively validated, measure of beverage alcohol performance in the American On Premise. Used to track share and trends by all the leading beverage suppliers, OPM is the most robust view of sales performance for bars and restaurants ever produced in the US.


The Spirits category is complex and diverse, with Vodka (26.6%) and Whiskey (26.4%) topping the list of popular choices for consumers. However, Tequila has managed to not only steal share from these top players, but also within other Spirits categories, showing the most volume growth in the latest 52 weeks of 54% versus a year ago. As of the start of December 2021, Tequila holds almost 16% of the spirit category sales in terms of volume, which has grown significantly since the end of 2016 when it held a volume share of 11.5%.


Taking a deeper dive into the category highlights how much Tequila has evolved, with many outlets expanding their offering to cater to consumer tastes. Silver Tequila holds the greatest volume share (52%) within the category and grew at 57% in the latest 52 weeks. However, subcategories such as Reposado (57% growth) and Gold (49% growth) are also becoming increasingly popular with consumers. One subcategory that has demonstrated significant growth is Anejo, increasing 61% over the last 52 weeks, highlighting that Tequila drinkers’ tastes in the US are expanding and evolving in a similar fashion to Whiskey drinkers.


When analyzing the growth of Tequila, it’s impossible to ignore the elephant in the room – the Margarita. This popular cocktail has been instrumental to the Tequila category’s expansion in the US On Premise and is the preferred choice of many consumers – with 49% of cocktail drinkers consuming it when out (CGA OPUS, Fall 2021). This is supported by BeverageTrak data, which highlights that the Margarita is the most popular cocktail by value velocity for 43 of the 48 US states within the cocktail read. CGA’s BeverageTrak service combines powerful datasets to provide an ultra-granular view of how Beer, Wine and Spirits are being ordered and distributed across the USA, offering an unprecedented view of the market with unparalleled transparency.


As highlighted in the OPM data, Tequila will no doubt continue its ascension in terms of popularity and growth. What will be vital for suppliers and operators is collaboration – to improve their Tequila offering and identify what further opportunities can be capitalized on. As part of their On Premise Measurement data, CGA can track how the category further evolves and the impact of further innovations within the On Premise.


Patrick Bannon Client Director, Americas

Patrick Bannon, CGA Client Director, Americas, said: “Tequila is no doubt a popular choice for consumers. It is important over the next period to see how this preference evolves and changes. It will be interesting to see whether the offering of different Tequila types will expand further in outlet and tequila offerings will mirror that of Whiskey.

It’s crucial for suppliers and operators to understand where the different types will grow and what opportunities will present themselves in the On Premise. As strategies will need to adapt to an ever-changing category, we at CGA will be keeping our finger on the pulse of the category through our OPM read as well as understanding its role within cocktails through the BeverageTrak Cocktail reports.”


For further details on CGA’s On Premise Measurement solutions, along with support in understanding trends at category, segment and brand level within the On Premise, contact Matthew Crompton at Matthew.Crompton@cgastrategy.com

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