US Tequila Market by Product, and Distribution Channel - Forecast and Analysis 2023-2027

US Tequila Market Forecast 2023-2027

The US tequila market size is estimated to grow by 89.21 million L at a CAGR of 5.99% between 2022 and 2027. The increasing number of strategic alliances, such as partnerships and collaborations, can help companies expand their market reach and access new customer segments. The growing demand from Millennials, who are known for their unique consumption habits and preferences, is driving companies to innovate and offer products and services tailored to this demographic. Additionally, the growing influence of online retailing is changing the way consumers shop, creating new opportunities and challenges for businesses in the market.

It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

What will be the Size of the Market During the Forecast Period?

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Market Segmentation

This market report extensively covers market segmentation by product (premium tequila, super-premium tequila, value tequila, and high-end premium tequila) and distribution channel (on-trade and off-trade).

By Product

The market share growth by the premium tequila segment will be significant during the forecast period. Premium tequila was the largest segment in the tequila market in US in terms of volume in 2022. This segment includes tequila products priced between 20 per liter and 30 per liter. It will be primarily driven by the increasing perception among consumers that premium tequila products are made from better quality ingredients than normal tequila.

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The premium tequila segment was valued at 109.95 million L in 2017. In this segment, an increase in new launches and the addition of new flavors to existing product lines drives the premium tequila segment. Millennials are an attractive consumer segment for market participants due to their high purchasing power. With this in mind, demand for premium tequila among millennials is expected to drive segment growth over the forecast period. 

Some of the major brands in this segment include Becle SAB de CV. For instance, under the portfolio Becle SAB de CV offers Tradicional Reposado, which is produced in Mexico and sold in US and Mexico under the premium tequila category. Such premium tequila products are also available through on trade and off trade channels. Therefore, the easy availability and affordability of premium tequila products in the US are likely to drive the growth of the segment during the forecast period.

Market Dynamics and Customer Landscape

The market is influenced by factors such as the Weber blue agave plant, which is used to produce this renowned spirit. Brands like Patron Spirits International drive the market with their premium offerings. The Tequila Regulatory Council (CRT) oversees the industry, ensuring quality and authenticity. Cocktail culture and celebrity endorsements further boost tequila sales, especially among the younger demographic, with marketing strategies leveraging social media platforms. Tequila variants like blanco, reposado, and anejo cater to diverse consumer preferences, while the natural sweetness of agave, with fructose and glucose, is a key element in its appeal, making it a favorite in cocktails and standalone drinks alike. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

One of the key factors driving growth in the market is the increasing number of mergers and acquisitions. Most of the large companies operating in the market are focused on acquiring smaller companies to increase their market presence and gain access to new products and technologies.  Therefore, an increase in strategic alliances such as collaborations mergers, and acquisitions is driving the growth of the market. Moreover, owing to the high popularity of tequila among consumers, especially millennials, the number of strategic alliances is expected to increase during the forecast period. These alliances may include celebrity endorsements and marketing efforts, leveraging the power of social media to boost tequila sales.

In addition to this, the concept of vertical integration is also gaining traction in the alcoholic beverages industry. As per this concept, the producing company is involved in and takes full responsibility for all the stages of the value chain. However, due to a three-tier system of alcohol distribution in the US, which comprises importers or producers; distributors; and retailers, vertical integration is prohibited in most parts of the US. Thus, the increasing number of mergers and acquisitions will have a positive impact on the growth of the market during the forecast period.

Significant Market Trends 

The increasing popularity of tequila among millennial consumers is the primary trend in the US tequila market. The growing popularity of tequila among millennial consumers is a positive trend that the market is eyeing. Millennial consumers have high purchasing power, making them an attractive consumer segment for tequila makers. Therefore, players have started developing new products for millennials. Many players are also coming up with new and innovative marketing strategies to connect with millennial consumers.

Social media has a considerable influence on the purchasing decisions of millennial consumers, and players have started focusing on using various social media platforms to advertise their products. The demand for premium tequila is increasing among Millennials, and most millennial consumers prefer 100% agave tequila products. Therefore, the increasing demand for tequila among millennial consumers will help in the growth of the market during the forecast period.

Major Market Challenge

The fatalities caused due to alcohol-impaired driving will be a major challenge for the market. The rising number of deaths from drunk driving in the United States is likely to limit the growth of the market in the coming years. Drunk driving accidents are on the rise in the United States, and nearly 28 people nationwide are killed every day due to drunk driving. Died in a car accident. The total annual cost of alcohol-related accidents exceeds US 40 billion.

In 2022, accidents that involved drunk driving contributed to about 40% of the overall traffic-related deaths in the US. This factor will affect the growth of the market during the forecast period. Many organizations, such as Mothers Against Drunk Driving (MADD), the American Medical Association, and the National Center on Addiction and Substance Abuse, are working toward discouraging alcohol consumption, especially among the youth in the US. Such factors will hinder the market growth during the forecast period.

Key Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Tequila Market in US Customer Landscape

Who are the Major Tequila Market Companies in US?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Ambhar Global Spirits LLC: The company offers tequila such as Tequila Reposado, Tequila Plata, and Tequila Anejo. 

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Becle SAB de CV
• Brown Forman Corp.
• Casa Aceves Spirits
• Charbay Distillery
• Davide Campari Milano NV
• Eastside Distilling Inc.
• El Grado Spirits LLC
• Heaven Hill Sales Co.
• Lucas Bols Amsterdam BV
• Suntory Holdings Ltd.
• Tequilera Corralejo SA de CV
• William Grant and Sons Ltd
• Bacardi Ltd.
• Constellation Brands Inc.
• Diageo Plc

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Outlook 
  • Premium tequila
  • Super-premium tequila
  • Value tequila
  • High-end premium tequila

• Distribution Channel Outlook 
  • On-trade
  • Off-trade

Market Analyst Overview

The market is evolving with a focus on health and innovation. Derived from the Agave Tequilana plant, tequila contains agavins and antioxidants that offer various health benefits, including improved blood sugar levels and bone health. Brands like Astral Tequila and Código 1530 Tequila are driving brand diversification and premiumization. The market is witnessing a rise in craft trends and product innovation, appealing to Gen Z consumers and health-conscious individuals. Initiatives by the Consejo Regulador del Tequila promote sustainable and ethical practices, aligning with the globalization of tequila consumption. Innovations in packaging, such as NFC-enabled authentication, enhance the consumer experience, while the popularity of cocktails drives the market's growth amidst competition from other spirits like rum, vodka, and whiskey.

The market is characterized by a blend of tradition and innovation. Made from the Blue Weber agave, tequila offers more than just a spirit; it provides cardiovascular benefits and supports digestive health. As consumers become more health-conscious, tequila stands out, especially with its gluten-free nature. The market sees ongoing innovation in packaging and design, appealing to modern consumers. According to the International Wine and Spirit Research (IWSR), Mexican spirits like OTACA Tequila are gaining traction, particularly the Platinum tequila variants. The rising popularity of cocktails has also contributed to the market's growth, highlighting tequila's versatility. Ultra-premium tequila, including Silver and White tequila, continues to attract enthusiasts despite concerns over synthetic flavorings in some products.

Market Scope
Report Coverage	Details
Page number	129
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 5.99%
Market growth 2023-2027	89.21 million Litre
Market structure	Fragmented
YoY growth 2022-2023(%)	5.51
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Ambhar Global Spirits LLC, Becle SAB de CV, Brown Forman Corp., Casa Aceves Spirits, Charbay Distillery, Davide Campari Milano NV, Eastside Distilling Inc., El Grado Spirits LLC, Heaven Hill Sales Co., Lucas Bols Amsterdam BV, Suntory Holdings Ltd., Tequila 512, Tequila Fortaleza, Tequilera Corralejo SA de CV, William Grant and Sons Ltd, Bacardi Ltd., Constellation Brands Inc., Diageo Plc, Pernod Ricard SA, and Casa Komos Brands Group
Market dynamics	Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across US
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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