Tequila exports grow 34% and break records

Mexican tequila exports totaled 3,635 million dollars from January to October 2022, which implied a year-on-year increase of 34.1% and a record.

In recent years, tequila has been one of the fastest growing spirits categories, noted Diageo, which produces tequila, with Don Julio among its top brands.

Mexican external sales of tequila have maintained constant growth in the last decade, from the 859 million dollars registered in 2012, according to data from the Ministry of Economy and the Agricultural Markets Consulting Group (GCMA).

Overall, global total alcoholic beverages (TBAs) posted a strong track record of value growth over the past 10 years, while international spirits, where Diageo is number one, they have grown faster than the TBA.

In both developed and emerging markets, growth is underpinned by attractive consumer fundamentals such as population growth, increasing penetration of spirits and increased demand for premium products. According to Diageo, another 600 million consumers are expected to come of age by 2032, and continued growth in “middle class and upper class” income should allow 600 million more consumers to access their brands.

Additionally, spirits penetration remains low and even in its largest market, the United States, only about 50% of households purchase spirits each year.

“Premiumization” is a long-established trend, with higher price levels set to grow at more than twice the rate of growth of the international spirits category between 2016 and 2021, according to Diageo projections.

The company has the largest premium-plus business within international spirits, and this segment now comprises more than half the value of its declared net sales. Its “superpremium plus” portfolio, which focuses on the global luxury opportunity, grew 31% in 2022. While the current economic environment can create volatility in the short term, the company remains confident of continued premiumization over the long term. Diageo forecasts continued growth in the tequila category as a result of strong customer and consumer demand, especially in North America.

Since tequila is produced from agave plants grown only in the Jalisco region, Mexico, typically with a maturity of six or more years, ensuring the availability of adequate volumes of high-quality raw materials is vitally important to ensure a continuous supply that meets consumer demand.

Agave supply is also highly dependent on a large number of small producers with limited infrastructure and capacity to supply large volumes of raw materials, leading to a volatile commodity market.

roberto.morales@eleconomista.mx