Eight Profitable Premium Tequila Trends
While we know them as 100% agave tequilas, in Mexico they’re referred to as Tequila Puro. One sip of these extraordinary spirits quickly reveals why they’ve captured the imagination of the American mainstream. Ounce for ounce, these ultra-premium tequilas are comparable in quality to vintage malts and barrel-aged Cognac. Plus, they’re so flavorful you’re left with the unmistakable impression that this is how tequila is meant to taste.
From harvesting blue agave plants to chopping and grinding it by hand for fermentation to distilling it in copper stills, handcrafed tequila takes time, effort and passion. All photos from Tequila 1921.
Because of this, there continues to be an extraordinary influx of new artisanal brands of tequila into the American market. After all, nothing breeds success like success. In some respects this is good news. Tequila drinkers tend to be different than vodka drinkers, who tend to find a brand they like and stick with it. On the contrary, tequila aficionados thrive on the sense of discovery, which makes stocking new brands a significant sales driver.
However, is there a point at which the market becomes so saturated that consumers and on-premise operators are overwhelmed and push back from the category?
Tequila importer Christopher Zarus, owner of the International Tasting Group, believes there’s room to grow. “The growth of the market has been dramatic. As of November 2010, there were 1,132 brands of tequila, an increase over five years of almost 600 brands,” he says. “Although the growth of the market has been dramatic compared with other distilled spirits, the category is still relatively small, ranked only 4th in U.S. volume. It has not grown fast enough to accommodate all of the entries into the field.”
According to David Ravandi, president of Casa Noble Tequila, the category is entering a stage of consolidation in the world market. “The demand for ultra-premium tequilas is no longer seen as a temporary thing. The fact that exports of 100% agave tequila have increased tremendously over the past two years is extremely positive for the product’s outlook.”
The unfettered growth of artisanal tequilas — 163 new brands this year alone — won’t likely bring about a push back by consumers, retailers or beverage operators. “For one reason, current distribution channels prevent many ‘brands of promise’ from ever gaining a foothold in the marketplace,” says Mike Morales, tequila journalist and executive editor of TequilaAficionado.com. “Examining the trends, we find saturation hasn’t affected artisanal tequilas in the same way it has in the value category. However, if the predicted shakeout proves accurate, it behooves operators and consumers to be discriminating, as small batch tequilas may be selling at markedly higher prices than we’re seeing now.”
Tequila is a maturing category. As consumers grow more discerning, distillers are responding by releasing the best and brightest their craft can produce. Their steadily increasingly sales confirm that we are developing a taste for the good stuff. So what’s in store for the category? Our panel of experts has identified eight mega-trends already in the works — how bartenders and managers take advantage of them may well determine how successful a bar or club can be with this growing spirit.
Terroir — We’re all products of our environment. The same holds true for blue agaves. They’re greatly affected by the growing conditions they’re subjected to over the eight to 12 years it takes them to mature. Factors such as rainfall, humidity, temperature, soil composition and the altitude of the fields ultimately dictate the quality and flavor of the agave’s residual sugars, which in turn, determine the quality and flavor of the finished tequila. The French refer to it as terroir, and it affects agaves and tequila in the same way it does grapes and wine.
Today, distillers are placing greater emphasis on whether their tequila originates in the lowlands of Jalisco or Amatitán, or the surrounding highlands of the Los Altos Mountains. Marketing for Tequila Don Julio, for example, highlights the spirit’s Los Altos origins. Yuri Kato, director of marketing and sales for Tequila Corrido, considers emphasizing appellations important. “I think regional distinctions enhance consumers’ understanding of the category, much in the same way we distinguish Scotch whiskies — Speyside vs. Islay — or even Cognac — Grand Champagne, Fins Bois etc.”
Dori Bryant, spirits guru and founder of the prestigious Spirits of Mexico competition, which will take place in Las Vegas in March as part of the Nightclub & Bar Show agenda (see sidebar), agrees. “Agaves cultivated in the red volcanic soil of the highlands are said to be more fruity, floral and sweet, whereas the lowlands produce plants that tend to be spicy, herbal, peppery and earthy. But don’t get too preoccupied with stereotypes; the most reliable means of assessment is to open a bottle and taste it.”
No brand stresses terroir more than ultra-premium Tequila Ocho Single Estate 100% Agave Tequilas. While all of the tequilas are distilled in the highlands at Cia Tequilera Los Alambiques (NOM 1474), each vintage-dated bottling showcases the agave from an individual estate. For example, the agaves distilled for the 2009 Tequila Ocho Añejo were cultivated in the heat and humidity of El Vergel Estate, which is located at a different altitude and miles away from Rancho Carrizal Estate, where the agaves used to make the 2008 vintage of Tequila Ocho Añejo were grown.
Organic — Few things connote quality and purity more than the word organic does. Expect that consumers will continue responding favorably to certified organic tequilas, which in turn will lead to the release of more organic tequilas. The thought of drinking tequila made from pesticide-treated agaves makes it easy to appreciate the commercial appeal. Early pioneers in USDA-certified organic tequila were lowland giants — 4 Copas from La Quemada distillery (NOM 1457), Casa Noble from La Cofradia Distillery (NOM 1137) and 3 Amigos, which is produced by Casa Tequilera de Arandas (NOM 1499).
Single Barrel Tequilas — Single barrel whiskies have become standard offerings. Will the same hold true for tequila? Industry veteran and co-founder of Muchote Tequila, Will Elger believes single barrel tequilas are justifiably a burgeoning trend. “Any spirit that’s drawn from one barrel and not blended with other barrels is truly amazing. When I sip a single barrel spirit, I savor every drop. It’s like a never-to-be-repeated slice of life.”
Tequila Corrido offers a range of single estate/single barrel tequilas. According to Kato, the founder of the brand — the late Brad Hoover — was a whiskey aficionado and wanted to apply whiskey-aging techniques to tequila. “Our master distiller Cesar Gonzalez repeatedly samples every barrel of Corrido before it’s bottled, which requires CRT officials to come and inspect each time we open a barrel. It’s a time-consuming process, but it’s the only way to ensure the quality and character of our single barrel tequilas.”
Other notable brands include 1921 Single Barrel Reposado and Añejo from Agave Tequilana Produccion (NOM 1079), Milagro Silver Select Barrel Reserve Silver, Reposado and Añejo by Industrializadora de Agave San Isidro (NOM 1420) and Casa Noble Single Barrel Reposado and Añejo.
Double Barreled Tequilas — Used American white oak barrels are most frequently employed for aging tequila. However, in an effort to infuse their aged marques with new and exciting flavors, tequila producers are increasingly finishing them in different types of wood, such as French Limousin oak, Cognac casks, sherry butts and ex-Bordeaux barrels.
Mike Morales believes the trend is a dynamic way for brands to achieve more distinctive flavor profiles than the competition. “Ultimately these tequilas are more expensive and labor-intensive to produce, which helps support their heftier price tags and their perceived exclusivity in the marketplace.”
Elevated Proofs — A number of brands have entered the market with elevated concentrations of alcohol, a distinguished group that includes Peligroso (84 proof), Herradura Blanco 46 (92 proof), Agave 99 (99 proof), Don Fulano Fuerte (100 proof), 1800 Silver (100 proof) and KAH Reposado (110 proof). This begs the question, is there any perceptible benefit to marketing tequilas higher than 80 proof?
Bryant believes there is. “The higher the proof, the less water is used to dilute the tequila when it comes off the still. The result is a more flavorful spirit. Overproof styles have rich, hearty and sophisticated flavors that consumers and mixologists tend to find appealing; it’s a trend with legs.”
Flavored Tequilas — Flavored tequilas are gradually becoming a viable segment of the category. Leading the charge is Gran Centenario Rosangel from Casa Cuervo (NOM 1122), a reposado tequila aged for a minimum of 10 months in French Limousin oak barrels. It’s then further matured in ex-port pipes and infused with sweet hibiscus flowers, a staple in Mexican culture and cuisine.
Other flavored thoroughbreds include La Pinta Pomegranate Infused Tequila from Clase Azul and Productos Fino de Agave (NOM 1416), which combines pomegranate juice with blanco tequila in roughly equal proportions, and Agave Loco Pepper Cured Tequila (NOM 1137), a 100% agave reposado, infused with the essential oils of six varieties of Mexican peppers.
Innovation — For all of the emphasis placed on tradition, the tequila category has benefited greatly from innovation and the drive to break from convention. A good example is Reserva del Maestro Dobel Diamond from Casa Cuervo (NOM 1122). Its blend is comprised of three small batch tequilas: an 11+ month-old reposado, a 2-year-old añejo and a 3-year-old extra añejo. Before bottling, the spirit is filtered to remove all traces of color. Reserva del Maestro Dobel Diamond is a tequila that looks like a blanco yet drinks like an añejo.
Another example of innovative, out-of-the-box thinking is the Tequila Rack, a unique set of boutique, 100% agave reposados, each handmade in extremely small batches at different family-owned distilleries. The collection includes Arette Unique, Don Celso Plascencia and El Caudillo. Each is characteristically distinct and worthy of exhibition at a museum.
Diversification — Paralleling the growth of tequilas is the resurgence of artisanal mezcals and sotols. As the points of distinction among tequila brands diminish, consumers are discovering the profound nuances in flavor and levels of complexity in these traditional agave spirits engaging.
“I think the ongoing renaissance of mezcals is directly related to the phenomenal success of tequila,” says Barbara Sweetman, vice president of ultra-premium Scorpion Mezcal. “Certification has greatly helped to advance the reputation of mezcal by requiring that it be made from 100% agave and produced under strict quality guidelines. Mezcal is also protected under Denomination of Origin status. The spirit now can be consumed with confidence and complete enjoyment.”
Sotol is distilled from the desert spoon plant, a variety of agave native to Chihuahua. It, too, is the direct beneficiary of tequila’s surging popularity. “While many people outside of northern Mexico do not know what sotol is, they find its tremendous depth of flavor intriguing once they taste it,” contends Brian Jacquez, director of marketing for award-winning Don Cuco Sotol. “I think consumers today are looking for spirits that are made in small distilleries because it connects them to that small town in Mexico where it was produced. Sotol and mezcal are only distilled by small companies. That adds another level to the artisanal concept.”
So what’s the consensus for tequila? Speaking on behalf of our panel of experts, Bryant contends these are the best of times for the category. Interest in handcrafted tequilas, mezcals and sotols is nothing short of phenomenal and is propelling the category to continued growth at a double-digit pace.
“Agave spirits possess every quality consumers are looking for: textured bodies, enticing aromatics, layers upon layers of sensational flavors and unlimited drink applications. Vodka simply can’t offer people the same enticements,” Bryant says. Viva la difference! NCB