It’s not news that tequila is near the top of spirits sales in the U.S. right now, outselling even red-hot American whiskey and just a few paces behind longtime leader vodka, according to the Distilled Spirits Council (DISCUS). Last year, tequila sales totaled 31.6 million cases, a rise of 5.7 percent over 2022. Revenue-wise, the category’s growth was even stronger, increasing 7.9 percent, equivalent to $476 million in additional sales.
Vibrant across the board, tequila is strongest in the premium-and-above tiers, where 100-percent agave brands dominate, accounting for at least 70 percent of U.S. tequila sales, according to Impact Databank. New offerings launch seemingly every week, often backed by celebrities or packaged in eye-catching bottles, and consumers are increasingly interested in the finer points of production and mixology. To support all this growth, tequila producers are investing heavily: planting agave, expanding distilleries, and working to continuously educate consumers about the category.
At this point, more tequila is sold in the United States than in any other country, including tequila’s homeland of Mexico. But with such extensive growth, producers are looking beyond North America at tequila’s global prospects. And there’s a lot of untapped territory.
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Opportunity Abroad
Outside the U.S., tequila’s next largest export markets are all in Europe: Spain, Germany, France, and the U.K. and Ireland, classified as a single market by Mexico’s regulatory agency for tequila, the Consejo Regulador del Tequila (CRT). Producers also cite Colombia as an important market, as well as Australia — not just for sales within its borders but for its status as a regional trendsetter.
“Australia carries a lot of influence in Asian markets,” notes Mauricio Vergara, president and COO at Patrón, pointing to China in particular as a major area of opportunity. “Tequila remains a niche segment within their international spirits market, which is predominantly led by Cognac. While other categories are still emerging, the expansion of tequila will likely parallel the broader growth of international spirits beyond Cognac.”
“Tequila has many options for consumers to experiment with, from unaged blancos that almost resemble the vodka space to the extra añejos that are closer to whiskies, bourbons, and Cognacs, and everything in between.”
Some producers see opportunity even beyond Europe, Asia, and Australia. Goza Tequila, a boutique brand with blanco, reposado, and añejo variants, is in conversations to export to South Africa, among other markets — though they’re planning to start modestly. “With the tequila market in Cairo, Nairobi, or another populous area, you’ve got a great opportunity,” says Goza CEO Paul Hletko. “Maybe we’re only in, say, 15 or 20 accounts, but you can build from that and do some really good stuff.”
Because overseas markets are less developed for tequila, consumers’ first encounter with the spirit is often simple: as a shot in a bar, or perhaps in a Margarita. But companies are working hard to introduce tequila through a variety of experiences, including elevated mixology.
“As consumers grow awareness and understanding of tequila, we expect consumption to expand beyond the predominant shot serves through the growth of contemporary cocktails,” says Mariana Esquinca, global partnerships and education manager for tequila at Brown-Forman, which owns the Herradura and El Jimador brands. She points to the U.K. as one market where this trend is taking root. “Tequila is such a versatile spirit. As bartenders discover it, they are experimenting with it and that’s ultimately reaching consumers,” she says.
Global Challenges
As with any spirit looking to get a foothold in a new market, education is the major hurdle brands have to conquer. Outside the U.S., many consumers have just a basic understanding of tequila as a Mexican spirit, and may only have tried an inexpensive mixto rather than the more upscale 100-percent agave variants that lead the category boom stateside. “One of the primary obstacles we face in introducing tequila to new markets is the limited knowledge about this diverse and rich spirit,” Vergara notes.
In addition, tequila often suffers from a bad reputation, still associated with the old “worm in the bottle” trope and seen as causing wild behavior or hangovers — a familiar problem for established brands that nevertheless requires work to surmount. “It’s similar to what happened in the U.S. many years ago — overcoming perceptions consumers may have built from early exposure via a shot or a cheap, low-quality tequila,” Esquinca says. “That presents a challenge, but also an opportunity.”
“Much of the growth we are seeing in European countries is made up of bulk exports for the local bottling and re-exporting of inexpensive tequila to Central America, the Caribbean, and elsewhere.”
Tequila producers aim to resonate with global consumers by touting characteristics like high-quality ingredients and the spirit’s deep-rooted heritage. “You have to talk about the story, the heritage and culture of not just Mexico, but specifically Guadalajara and its environs,” Hletko says. “You’re telling a story with tequila, and that’s the key for educating new consumers.”
The core message for many brands focuses on tequila’s versatility. As a mature market, U.S. consumers have a huge choice of tequilas to meet a variety of needs and niches, but elsewhere, the options are more limited. Tequila companies are working to change that, and increased shelf variety will likely go hand-in-hand with rising consumer knowledge.
“Tequila has many options for consumers to experiment with, from unaged blancos that almost resemble the vodka space to the extra añejos that are closer to whiskeys, bourbons, and Cognacs, and everything in between,” Esquinca says. “There’s so much more to offer and that allows for people to experiment.”
A Class By Itself
Amid all the optimism about international opportunity, tequila’s road forward isn’t likely to be totally straight and smooth. Last year, tequila exports actually fell by 4.2 percent, according to the CRT. This shouldn’t be cause for alarm: Most spirits sales were down in 2023, as retailers that built up stock during the pandemic mini-boom are now working their way through it. And value-wise, tequila exports still grew by 4.5 percent. But in the state of Jalisco, tequila’s heartland, production was down more than 8 percent, even as agave prices softened toward the end of the year — a sign, perhaps, of sensitivity to American sales trends.
Because, after all, Mexico’s northern neighbor still takes the lion’s share of tequila exports — more than three-quarters, in fact. So while the IWSR projects tequila’s global growth at 7 percent through 2027, the U.S. will still outstrip it at 9 percent, lengthening a lead that’s already so great, the rest of the world isn’t even in the same race. Spain is tequila’s next largest export market, and it accounts for a scant 2 percent of sales.
On top of that, in many European markets where tequila is finding success, it’s not always due to individual drinkers picking up a bottle or ordering at a bar. Dan Mettyear, the IWSR’s head of research for Europe, the Middle East, and Africa, said in a recent article that “much of the growth we are seeing in European countries such as Spain, France, and Germany is made up of bulk exports for the local bottling and re-exporting of inexpensive tequila to Central America, the Caribbean, and elsewhere. There is also some premium tequila growth in Europe, but off a very small base.”
In other words, the rest of the world has a long, long way to go before it catches up to American drinkers. But tequila companies are betting it will. “We all know spirits are a cycle,” Hletko says. “But at the end of the day, the tequila cycle hasn’t even begun in half the world’s population.”
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