Tequila Market Size
The Global Tequila Market reached US$ 10.5 billion in 2022 and is projected to witness lucrative growth by reaching up to US$ 16.1 billion by 2031. The market is growing at a CAGR of 5.5% during the forecast period 2024-2031. Tequila has found its place in the world of mixology, with bartenders and consumers experimenting with creative and innovative tequila-based cocktails.
Tequila has experienced significant growth in global consumption, driven by increasing popularity in countries beyond its traditional markets like Mexico and the United States. Countries such as Germany, the United Kingdom, Australia, and China have seen rising demand for tequila. There has been a growing trend of premiumization within the tequila market, with consumers willing to pay more for higher quality and artisanal products. Craft tequilas, made by smaller distilleries using traditional methods and high-quality ingredients, have gained popularity among enthusiasts seeking unique flavors and experiences. The production process of tequila involves several key steps, from agave cultivation to distillation Margaritas, Palomas, and Tequila Sunrises are just a few examples of popular tequila cocktails that have gained mainstream recognition.
Market Summary
| Metrics | Details |
| CAGR | 5.5% |
| Size Available for Years | 2022-2031 |
| Forecast Period | 2024-2031 |
| Data Availability | Value (US$) |
| Segments Covered | By Product Type, By Grade, By Distribution Channel |
| Regions Covered | North America, Europe, Asia-Pacific, South America, and Middle East & Africa |
| Fastest Growing Region | Asia-Pacific |
| Largest Region | North America |
| Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and Acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, Porter’s Analysis, Pricing Analysis, Regulatory Analysis, Supply-Chain Analysis, and Other key Insights. |
Market Dynamics
Increasing Demand for Premium Spirits is Driving the Market Growth
Tequila, which is a distilled alcoholic beverage made from the blue agave plant, has experienced a surge in popularity worldwide, particularly in the premium segment. Consumers are becoming more discerning in their choice of spirits, seeking high-quality and premium products. For instance, according to ISWR, by 2024, premium-and-above spirits, including cocktails and expensive sipping spirits, are expected to have a 13% global volume market share as consumers continue to value quality over quantity. As people become more knowledgeable about tequila, they are willing to explore and appreciate the unique flavors and characteristics offered by premium tequila brands.
Tequila has shed its image as a party drink and gained recognition as a sophisticated spirit. It is now being appreciated for its complex flavors, production techniques, and regional distinctions. This shift in perception has increased the demand for premium tequila, as consumers seek out tequila as a sipping spirit and for craft cocktails.
Consumers' Growing Interest in Unique and Exotic Flavours is Driving the Market Growth
Consumers today are more adventurous and open to trying new and distinctive flavors. According to the Distilled Spirits Council of the United States (DISCUS), the supplier value of spirits increased by 5.1% in 2022 to a record amount of $37.6 billion, capturing 42.1% of the market for beverage alcohol as opposed to beer's 41.9%. Consumers seek novel taste experiences that go beyond traditional options. Tequila, with its diverse flavor profiles ranging from earthy and smoky to fruity and floral, caters to this demand for exploration and offers a unique taste experience.
The increasing consumer preference for craft and artisanal products has influenced the tequila market. Artisanal tequila brands focus on producing small-batch, high-quality tequilas with unique flavor profiles. These brands often experiment with aging techniques, barrel types, and ingredients to create distinct flavors that appeal to consumers seeking something different. Overall, the consumer's growing interest in unique and exotic flavors has fueled the demand for tequila, prompting the industry to innovate and expand its offerings.
Rising Consumer Demand for Low and No-Alcohol Beverages, is Restraining the Growth of the Tequila Market
Increasing awareness of health and wellness has led to a shift in consumer preferences towards healthier choices. According to WHO, alcohol abuse causes 3 million deaths worldwide each year. This amounts to 5.3% of all deaths. Many consumers are now opting for low-alcohol or non-alcoholic beverages to reduce their alcohol consumption or to avoid it altogether. This trend may result in a decline in the demand for traditional alcoholic spirits like tequila.
The evolving lifestyles of consumers have contributed to the demand for low and non-alcohol beverages. Factors such as the rise of fitness and wellness culture, the focus on responsible drinking, and the growth of sober socializing have influenced the choices of consumers. As a result, some consumers are moving away from high-alcohol beverages like tequila and opting for alternatives that align with their lifestyle choices.
Market Segmentation Analysis
The global tequila market is segmented based on product type, grade, distribution channel, and region.
Unique Flavor Profile of Blanco is Driving the Segment Growth
In 2022, the Blanco segment had the highest revenue share in the tequila market. Because of its earthy, semi-sweet, distinctive agave flavor, the blanco variants account for the majority of revenue. For instance, according to Statista, more than 13.9 million liters of tequila blanco were produced in Mexico in July 2022, an increase over the 11.91 million liters reported in May 2021. This implies an increase of over 2 million liters in just thirteen months.
Blanco is widely consumed due to its smoother taste and easy availability. Blanco variants are widely used in various drinks such as margaritas and Palomas, resulting in it having the biggest market share. Consumers are growing more aware of the spirit and willingness to try new variations, therefore reposado and anejo variants have gained a lot of popularity in recent years. Reposado and Anejo, unlike blanco, are matured in oak barrels for a month to a year, giving them a distinct honey and smoky flavor.
Market Geographical Share
Consumer Preference for Agave Spirits in North America
In 2022, North America held the highest share of the tequila market because of the expanding consumer preference for agave-based spirits in the United States and Mexico. In 2022 the American market sold more than 29 million 9-liter tequila, an 11.5 percent increase from the previous year. Tequila is the fastest-growing drinks category in the region, according to the International Wine and Spirits Research (IWSR). This expansion might also be attributed to the region's growing Hispanic population and premiumization trends.
North America, especially the United States, has well-established trade relations and distribution networks with Mexico. This facilitates the import and availability of tequila in the region. The extensive distribution channels, including liquor stores, bars, and restaurants, ensure a wide reach and easy accessibility of tequila products to consumers in North America. Overall, the combination of cultural affinity, consumer demand, trade relations, premiumization, and effective marketing efforts have propelled North America to hold the highest share of the tequila market.
Market Key Players
The major global players include Diageo Plc., Tequila Ocho, Bacardi & Company Ltd., Vault Fine Spirits Pvt. Ltd., Charbay Distillery, Tequila Fortaleza, Proximo Spirits, Inc., Brown-Forman Corporation, Pernod Ricard S.A., Casa Aceves Spirits
COVID-19 Impact on Market
Because of the shutdown of various manufacturing facilities and difficulties in transportation and logistics, the COVID-19 pandemic has had an impact on the worldwide economy and food industry. Despite the outbreak's devastating impact, the market maintained a stable annual sales performance. Tequila output grew 3.8 percent over the same period last year, according to the Tequila Regulatory Council (CRT). Consumers have shifted to drinking at home as a result of the pandemic, reflecting the increased growth. Despite the closure of brick-and-mortar alcohol outlets, the e-commerce channel grew as individuals began ordering drinks online. A disrupted supply chain network, on the other hand, has pulled down overall business growth all across the world.
AI Impact
Artificial intelligence (AI) can have several impacts on the tequila market, including its production process, agave cultivation, agave harvesting, agave cooking methods, agave fermentation, and distillation techniques. AI can analyze historical data on agave cultivation, including weather patterns, soil conditions, and disease outbreaks, to generate predictive models.
AI-powered remote sensing technologies, such as satellite imagery and drones, can provide real-time monitoring of agave fields. This enables tequila producers to assess plant health, identify pest infestations or diseases, and optimize irrigation and fertilization strategies. AI algorithms can analyze the collected data to provide actionable insights for improving agave cultivation practices.
Key Developments
- In April 2022, Diageo, a manufacturer of premium drinks, launched Astral Tequila in the US, a super-premium tequila crafted with 100% blue Weber agave.
- In February 2022, Pernod Ricard’s Avion, convivial global wine and spirits group, launched avian Reserva Cristalino Tequila under its reserve line-up.
- In February 2022, Suntory Holdings Limited’s brand Tres Generaciones tequila introduced aejo Cristalino, its new ultra-premium offering
Why Purchase the Report?
- To visualize the global tequila market segmentation based on product type, grade, distribution channel, and region understand key commercial assets and players.
- Identify commercial opportunities by analyzing trends and co-development.
- Excel data sheet with numerous tequila market-level data points all for segments.
- PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
- Product mapping available as excel consisting of key products of all the major players.
The Global Tequila Market Report Would Provide Approximately 61 Tables, 59 Figures and 102 Pages.
Target Audience 2024
- Manufacturers/ Buyers
- Industry Investors/Investment Bankers
- Research Professionals
- Emerging Companies
