Market Watch, Summer 2020

40 MARKET WATCH MARKETWATCHMAG COM SUMMER 2020 has supported the recognition of 100 blue agave Tequilas whose share of the category has risen considerably from a decade ago when it stood at just 178 of total Tequila imports that number reached an all time high in 2019 hitting 576 according to Impact Databank At the top of the luxury heap is Patrón which jumped 11 last year to 28 million cases Key to Patróns gains are its aged expressions Reposado 50 a 750 ml Añejo 55 and Extra Añejo 90 Our core aged Tequilas are up anywhere from 25 75 in the past year which is incredible says Patrón global vice president of marketing Adrian Parker Were seeing a lot of traditionally Bourbon or whisk e y drinkers switch over to barrel aged Tequila expressions There are also a lot of blanco drinkers who are now moving through the category toward more aged expressions To meet the heightened demand for its aged offerings Patrón unveiled a new barrel aging facility last October bringing its total capacity for aging spirits to over 20000 barrels double the previous level The 17000 square foot space features a tasting area for brand education as well as an underground bar for entertaining In conjunction with the new facilitys debut Patrón released its oldest expression to date Extra Añejo 10 Años 350 a 750 ml The first batch was depleted in a matter of two to three weeks says Parker And that response alone is such a strong indicator of the appetite for older more premium expressions The 10 year old Tequila was aged in a mix of American oak and American Limousin oak barrels prior to bottling at 40 abv Bacardis 2018 acquisition of Patrón has greatly supported the brands ongoing upscale innovations Elsewhere in the luxury Tequila space Herradura has also taken to innovation in maturation Later this year the Brown Forman owned brand is set to introduce Legend which is first The lions share of Tequilas volume is in its blanco expressions which remain the entry point for many consumers and serve as the preeminent mixer in Tequila based cocktails Increasingly however aged iterations like reposado and añejo are taking a greater portion of the spotlight as consumers move toward sipping Tequila neat and enjoying it in traditionally whisk e y based cocktails Concurrent with the rise of aged Tequila are greater experimentation with unique cask finishes and extended aging periods the results of which are enjoying considerable attention from both consumers and the trade But Tequila still has its own set of roadblocks Amid the Covid 19 closures that have impacted the on premise this key sector for many brands has been shattered At the production level agave supply is still enduring a crunch as new brands flood the market Despite those complications many Tequila makers share an optimistic outlook as the categorys retail sales have surged spectacularly in the wake of the pandemic and more planted agave is slated to come on stream by the end of 2020 to loosen the supply valve Leaders In Luxury U S consumers have wholeheartedly embraced Tequila especially at the luxury end where innovation abounds This TEQUILA CONSUMPTION IN THE U S 1999 2019 millions of 9 liter case depletions Calendar Years Source IMPACT DATABANK 2020 50 75 100 125 150 175 200 19 17 15 13 11 09 07 05 03 01 99 Aged Tequilas are playing an increasingly important role for many brands including stalwart Patrón barrels top which unveiled a new aging facility last year and newer labels such as Jaja Tequila above