| | |  Business News | February 2009 
Global Market Review of Tequila - Forecasts to 2013
 Just-Drinks
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Some 17 out of the top 20 global Tequila markets (including travel retail) posted gains over the 2002-2006 period.
The history of the Tequila industry has been one of boom and bust. Sales rose during the 1940s only to collapse again in the mid-50s. Export sales rose steadily from the 1960s onward, although domestic sales fell sharply in the 1980s due again to an economic slump, and the severe Mexican economic crisis of the early 1980s resulted in plummeting sales.
The market was again disrupted by a critical shortage of agave beginning in the late '90s, which served to hold back the category's international development as brand owners were forced to divert limited supplies to the core US market, and quality perceptions were damaged as some manufacturers moved from 100% to 51% agave products.
Today the market is in oversupply and that dynamic is in reverse. More and more 100% agave products are coming to market. This is helping to raise quality perceptions, and in turn demand is surging, not only in core Mexican and US markets but across a number of countries. The outlook for the category has rarely been better, and Casa Noble Tequila president and COO David Ravandi commented "Tequila is entering a stage of consolidation in the world markets. It is no longer a fad. The fact that 100% agave Tequila exports have increased tremendously over the last two years is extremely positive for the product's outlook in the years to come."
For more exclusive comment on the growing Tequila sector, take a look at our brand new title, the Global market review of Tequila - forecasts to 2013. The report provides an overview of the market, takes a look at trends in the sector, (such as the rise of premiumisation and experimentation with flavours and infused spirits), and provides brand share data for the global, US, Mexican and travel retail markets. Exclusive comment from senior executives such as Brown-Forman senior vice-president for Herradura John Hayes, and Bevin Gove, director, Jose Cuervo International are also included.
Main companies and their brands, such as Beam Global with Sauza and Diageo with Cuervo are profiled, and data provided includes historic and forecasted consumption trends in key markets from 2002 to 2013.
Chapter 1: History and product characteristics - This chapter provides an introduction to Tequila and its history, along with commentary on the rise of mezcal exports and the regulations surrounding Tequila.
Chapter 2: Size of market - Tequila has been displaying high volume growth across a broad spectrum of international markets. Between 2002 and 2006, Tequila displayed average annual volume growth of 7.4% to reach 20.3m nine-litre cases, according to The IWSR. This chapter includes comment from Sauza senior brand director Andy Floor and provides global Tequila consumption data through to 2013.
Chapter 3: Industry structure - The positive outlook for Tequila has encouraged some industry heavyweights to invest in the category. Beam Global's acquisition of the Sauza brand from Allied Domecq (via Pernod Ricard) in 2005 and Brown-Forman's acquisition of Herradura at the beginning of 2007 were the two biggest splashes, involving the second- and fourth-largest Tequila houses, respectively. We further discuss other significant ventures and acquisitions, and provide comment from Heaven Hill president Max Shapira.
Chapter 4: Premiumisation trends - The greater availability of agave supply has helped to fuel a growing connoisseur market for super- and ultra-premium aged Tequilas in Mexico and the US. A number of executives from Tequila brands such as Sauza, Patrón, Casa Noble Tequila and Herradura discuss this trend and the move of consumers towards a higher end product.
Chapter 5: Diverse usage - One of the real growth drivers in this sector has been due to Tequila's diversity. In most markets it is consumed as shots, or used as the basis for the Margarita cocktail. We talk about innovation and the increasingly diverse useage of Tequila in this chapter. Flavoured and infused Tequila is starting to feature in the market, and Beam Global has re-launched Sauza Hornitos, and introduced its 'Sip, Shoot and Savor' strategy, in direct response to an evolving category.
Chapter 6: Inventory issue - A big reason for the acceleration of growth in Tequila since 2002 has been the restoration of agave supply; however Tequila supply could come under pressure in the next couple of years indicating that another supply crisis looms. We discuss possible future shortages and how Tequila producers are preparing themselves.
Chapter 7: Key markets - In this extensive chapter we discuss each of the 15 key markets, and provide market share by brand for the Mexican, US and travel retail markets, along with consumption data for 2002 and 2005 to 2013. Comment from executives at leading brands is included and they discuss growth and trends in the sector.
Chapter 8: Company profiles - Tables showing the leading markets for the brands featured in the report are provided in this chapter along with comment on each company's marketing campaigns, products and market share. |
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