Liquid Thinking

The Tequila Revolution

Has it happned yet?

27th April 2022

Tequila has long been tipped as the next big thing…and in some places it is. But while the category may be riding high in the US, is the UK really ready to embrace it?

First thing’s first… there’s tequila. And then there’s ‘sipping’ tequila. Let it be acknowledged that many markets – including the UK – have long moved past the era of tequila simply being an accompaniment to a high intake of salt and lime, and a plethora of bad decisions.

Brands such as the ubiquitously popular Patron have helped transform the landscape of tequila, leading the ‘sipping not shooting’ revolution, and helping raise both perceptions and prices in its wake. On behalf of those peer-pressured too many times to take a shot at the bar, we thank you.

Yet, in the same way that rum – or more recently hard seltzers – have been touted as the next big thing, in recent years, so has tequila. Yes, it seems that every trend that blows up in the US is then tipped to wash on to UK shores. And while in the States – a market with a much more immediate geographic and cultural connection to Mexico – the lofty tequila-boom may be true, can that really be said for the UK?

‘Stratospheric’ increases

Arguably, yes and no. Globally, super-premium (think Patron, but also brands such as Don Julio and Herradura) tequilas have been on a stratospheric rise selling 5.1 million cases in 2020, compared to just 665,000 cases in 2005, according to the Distilled Spirits Council of the US (Discus). And in the US, total tequila doubled its sales in the ten years to 2020, to 22.2m cases, with volumes up by 5% in 2021.

But in the UK, sales are actually also on the up. More than one and a half million bottles were sold in the 12 months to September 2021, an increase of 36% on 2020, reaching £33m, according to the Wine & Spirit Trade Association (WSTA). Could it be that tequila’s reputation as a drink to celebrate the good (read as: out of lockdown) times, lives on?

But the headline stats don’t stop there. According to CGA, tequila sales in the UK on-trade increased by 106% in the year to February 2022. And though that should be taken with a pinch of salt (lime optional), when accounting for on-trade closures, the overall figures look compelling. On trade sales of premium tequila rose in value from £9.35m to £22.43m, whereas sales of standard rose from £40.22m to £81.47m.

Pent-up partying

So, why? Well, tequila’s celebratory vibe currently fits with the consumer mood, where pent-up desires for gatherings and celebration are still being acted out, as many are still experiencing their first non-lockdown holiday, birthday, family reunion, etc.

Also, against a backdrop of a shift towards tropical and exotic serves, tequila cocktails such as the Margarita are having a resurgence at home and in bars, both high-end and mainstream. And finally, according to the WSTA, tequila sales are also being driven by the ramping up of the shift in sipping tequila, rather than just mixing it.

“With the public having to find different ways of brightening up their weekends during lockdown periods, we saw a keenness to experiment with new and exciting drinks choices,” WSTA’s CEO, Miles Beale, said.

The fact is that sales are on the up, and with that a flurry of brands are now making a play for the UK market. But now that it’s here, will the boom last?

Has anything really changed?

Well, the jury is out. The current embrace of the spirit as something to celebrate with, is hardly a marked shift from its long-held image as a party drink. Though sales are booming, have perceptions changed enough to move tequila more into the everyday drinking repertoire of British drinkers?

Unlike in the US, the UK consumer has far fewer cultural ties to the drink, and it’s less ingrained in drinking culture. Also, the star-power driving some of the industry’s fastest growing brands – it seems every US celebrity now aspires to own one – doesn’t fully resonate on this side of the pond either. Sure, we’ve heard of George Clooney, Kendall Jenner, and The Rock, but I’ll give you £5 if you can tell me who Diego Osorio, Jeanie Buss or John Varvatos are.

Though the days of shooting tequila are diminishing, its lingering associations with big nights out still prevent it from being an obvious choice for consumers simply looking for a low-key weeknight drink, especially in a market increasingly driven by lower-strength refreshment. Brand owners will have to work hard to bring tequila to the level of gin, something that has become an auto-pilot order for many British consumers.

And – not wanting to feed into the stereotype of weather-obsessed Brits – but do we really have the climate to sustain sales? Though many fine, artisan tequilas, should be and rightly are appreciated year-round for their nuanced flavour and smooth taste, the vast majority of Brits still view it as a sunshine drink, especially when it comes to cocktails. Once the flurry of exuberant escapism drinking has died down, and the winter coats come out, what then?

And finally – perhaps crucially for any brands now eyeing the market – do Brits truly understand what makes a good tequila? And do they have any knowledge of the different variants available? Sure, Patron has done a great job in educating global markets as to what a tequila truly can be taste-wise, but are consumers discerning enough to weed out quality new liquids from those that simply look good?

A quiet revolution

That said, some quiet changes are afoot. Brand owners, and some strong work by creative drinks design agencies, have rather subtly been working to change perceptions of the category, shifting packaging design most notably from candy skulls and horns, to a much calmer, more aspirational, and more unisex palette of sunsets and constellations. Think El Rayo and Mijenta, among others. That tequila is being embraced by a younger, increasingly female crowd, is a significant win for the category.

Conjointly, its image as a hedonistic hangover instigator could have alienated it from the younger, hipper crowd it needs to attract, a crowd that has readily embraced wellness and moderation. But the problem may be that its appeal is aesthetic only. Are the consumers lured by its Instagram-friendly aesthetic really going to be consuming it regularly?

And that may be the issue; regular, repeat consumption. Brand owners will have to work hard – and together – to champion a serve that feels authentic to the category and its Mexican roots, while still serving the dominant UK consumer’s need for light refreshment. Margaritas may be trending, but with extremely limited availability in venues such as pubs, they won’t keep the category in its current boom for long.

Serves such as the Paloma (tequila, lime, grapefruit, soda) have been championed in the UK by various brands, and yet it hasn’t really stuck. With soda trending as the thirst for lighter serves ramps up, could now be the time to try again?