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Tequila Market Size, Share & COVID-19 Impact Analysis, By Type (Blanco, Reposado, Anejo, and Others), Grade (Value, Premium, High-end Premium, and Super Premium), Distribution Channel (On-trade and Off-trade), and Regional Forecast, 2021 – 2028

Region : Global | Format: PDF | Report ID: FBI104172

 

KEY MARKET INSIGHTS

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The global tequila market size was USD 9.41 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with tequila witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a higher growth of 6.4% in 2020. The market is projected to grow from USD 9.89 billion in 2021 to USD 14.70 billion in 2028 at a CAGR of 5.8% in the 2021-2028 period. The slight fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.


It is a Mexican distilled spirit made from fermenting the juices of the Weber blue agave plant. According to the International Wine and Spirit Research (IWSR), blue agave plant distilled beverage is the second-fastest-growing spirit in the category in the recent few years. It has emerged as a spirit to be sipped and savored rather than consumed in shots form with a wedge of lemon. The manufacturers are coming up with innovative flavors to keep up with the ongoing trend of artisanal spirits. The growing likeability for spirits worldwide has nudged the international liquor companies to exploit the beverage’s barrel-aged variants. Further, new celebrity endorsements in the spirit are projected to fuel its demand in the forecast period.


Complex Sales Through Off-Trade Channels amidst COVID-19 to Support Growth


The COVID-19 pandemic has impacted the global economy and food industry owing to the closure of various manufacturing facilities and disruptions in transportation and logistics. Despite the staggering effects of the outbreak, the market reported a steady annual sales performance. According to the Tequila Regulatory Council (CRT), its production increased 3.8% compared to the same period of the previous year. The pandemic has led the consumers to shift towards drinking at home, reflecting the increased growth. Though the bricks-and-mortar alcohol stores remained closed, the e-commerce channel flourished as people started ordering their drinks online. However, a disrupted supply chain network has pulled down the overall business growth all across the world.


LATEST TRENDS


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Cocktail Trend for Artisanal Craft Spirits to Boost Growth


The surging trend of infusing various spirits to create new cocktails to serve exceptional alcoholic beverages is boosting the market. The rise in cocktail culture has led to consumers' growing interest in tequila-based cocktails including Paloma, El Diablo, and others. The provenance, versatility, and depth of flavor in the spirit influence its increasing consumption. Along with this, the ready-to-drink cocktail category is gaining popularity, which has led some major brands to keep up with the trend by launching RTD cocktails. For instance, in January 2021, Molson Coors Beverage Co. partnered with spirits company Casa Komos Beverage Group to market ready-to-drink carbonated Paloma cocktail, Superbird.


DRIVING FACTORS


Introduction of New Exotic Flavors to Attract Consumers Attention


The rising popularity of artisanal spirits among consumers worldwide has encouraged the rise in demand for blue agave plant distilled beverages. Consumers worldwide demand fresh and delicious exotic drinks for a unique taste, thereby propelling the market growth. Major manufacturers such as Patron Spirits International introduced various flavors such as turmeric, floral, black pepper, and pumpkin to attract consumers and explore new flavors. According to the Distilled Spirits Council of the United States, also known as DISCUS, in 2019, the spirit industry experienced accelerated growth, with sales rising to 37.8% of the alcoholic beverages market. This was driven by the sales growth of tequila, which was up by 12.4% in 2019.


Soaring Demand for Premium Spirits to Support Market


Premiumization has become a trend in recent years as consumers are inclining towards quality over quantity. As consumers turn towards more sophisticated and premium beverages, demand for products grows consequently. According to the DISCUS, the strong growth in terms of revenue in the alcoholic beverages industry was mainly attributed to the rising demand for high-end premium and super-premium spirits. Increasing urbanization and the disposable income of middle-class consumers have influenced their changing preferences. Thus, the new consumption habits continue to drive the premium spirits category and boost the market growth.


RESTRAINING FACTORS


Rising Trend for Low Alcoholic Beverages to Hamper Market Growth


The rise in consumers’ demand for low and no alcohol beverages due to their growing awareness about the ill effects of alcoholic beverages on health acts as a restraint in the market growth. According to the IWSR research report, in 2019, nearly 52% of the adults in the U.S. drinking alcohol are trying to reduce their alcohol consumption. The Office for National Statistics, U.K., in 2018, there were nearly 7,551 deaths due to alcohol-specific causes in the U.K. Furthermore, worldwide the alcohol consumption dropped by 1.8% in 2018 as the consumers are moving towards healthier and appealing beverages. Further, various industry players are investing in no and low-alcohol beverages to entice new consumers, which hampers the market growth.


SEGMENTATION


By Type Analysis


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Blanco to Account for Major Market Share


Based on type, the market is segmented into blanco, reposado, anejo, and others. The blanco variants account for the major share owing to its earthy, semi-sweet, distinctive agave flavor. Its smoother taste and vast availability result in its wide consumption. The broad utilization of blanco variants in various cocktails such as margarita and Paloma contributes to it holding the market’s largest share.


Reposado and anejo variants are gaining significant traction in recent years as consumers are becoming more knowledgeable about the spirit and are willing to explore new varieties. Unlike blanco, reposado and anejo are aged in oak barrels ranging from a month to a year, giving them distinct honey and smoky finish.


By Grade Analysis


Super Premium to Emerge as the Fastest Growing Variant; Premium to Lead Worldwide


The premium variant is anticipated to hold the largest share as consumers are demanding high-quality craft spirits. The premium-grade spirit is a combination of all desirable attributes, i.e., sensory appeal, mouthfeel, and texture, widely cherished by the consumers. The youngsters and millennials are demanding such luxury spirit variants, mainly driving the market.


The high-end premium and super-premium products are among the fastest-growing categories due to the consumers’ changing attitudes and their willingness to spend more on drinks. According to the DISCUS, between 2012-2017, the super-premium and high-end premium spirits grew 6-7% per year by volume.


By Distribution Channel Analysis


On-Trade Sales to be the Major Distribution Channel


The on-trade sales channel is one of the prominent sales channels to serve alcohol and is anticipated to dominate the market share. The consumers in developed economies prefer quick servings and entertainment and ambiance, which drive the on-trade sales. However, the off-trade channel is witnessing a strong growth as purchasing alcohol from supermarkets, and bricks-and-mortar stores are much more economical. Further, the availability of door-step delivery of alcohol on buying alcohol online facilitates the segment growth.


REGIONAL INSIGHTS


North America Tequila Market Size, 2020 (USD Billion)

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North America dominated the market and was valued at USD 5.77 billion in 2020. This is owing to the growing consumers’ inclination towards agave-based spirits in the U.S. and Mexico. According to the International Wine and Spirits Research (IWSR), it is the region's fastest-growing drinks category. This growth is also attributable to the increasing Hispanic population and increased premiumization trends in the region. Along with this, the key players are expanding their exports, and in 2019, 70% of the blue agave plant distilled beverage produced in Mexico was exported to 120 countries, while the U.S. held the major share. The manufacturers are also introducing new flavors of tequila, coupled with celebrities’ growing interests in the spirit is expected to further positively influence the demand in the region.


Following North America, Europe is projected to hold the second-largest position in the global tequila market share and remain the same throughout the foreseeable years. The increasing popularity of artisanal spirits in countries such as Germany, Spain, and the U.K. has contributed to the market growth. Further, in March 2019, the spirit registered its geographical indication (GI), giving it recognition as EU spirit and will benefit its market added-value as EU-protected products. This is expected to further boost its performance in the region.


In Asia Pacific, the spirit has gained recognition among consumers, especially the millennials in countries such as China and Australia. The increasing imports, coupled with consumers seeking quality over quantity and preferring spirits made in small batches, have supported the market growth.


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Latin American countries such as Brazil and Argentina are witnessing an upsurge in alcohol consumption, which is likely to contribute to the overall regional performance. The Middle-East and African regions observe premiumization and innovation trends in white spirits, which supports the market growth.


KEY INDUSTRY PLAYERS


Companies to Introduce Innovative Variants to Remain Competitive


The market is moderately consolidated due to the extensive production of tequila in Mexico and the U.S. Along with this, the presence of prominent players innovating and launching their products around the world. Companies such as Diageo Plc, Bacardi & Company Ltd., Proximo Spirits, Inc., and Pernod Ricard S.A. are focusing on new product developments and increasing their exports to diversify their product portfolio and maintain an edge in the market.


LIST OF KEY COMPANIES PROFILED:



  • Diageo Plc (London, United Kingdom)

  • Tequila Ocho (United States)

  • Bacardi & Company Ltd. (Hamilton, Bermuda)

  • Vault Fine Spirits Pvt. Ltd. (Mumbai, India)

  • Charbay Distillery (United States)

  • Tequila Fortaleza (México)

  • Proximo Spirits, Inc. (New Jersey, United States)

  • Brown-Forman Corporation (Kentucky, United States)

  • Pernod Ricard S.A. (Paris, France)

  • Casa Aceves Spirits (Mexico)


KEY INDUSTRY DEVELOPMENTS:



  • November 2020: Electric car brand Tesla launched Tesla Tequila, which has been aged for 15 months and is available on the online platform in the U.S.

  • September 2019: Nick Jonas, an American singer, launched his own tequila line called Villa One made using sustainably sourced agave in the U.S.


REPORT COVERAGE


An Infographic Representation of Tequila Market

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The tequila market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible segments in the market. Various key insights presented in the report are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.


Report Scope & Segmentation














































 ATTRIBUTE



  DETAILS



Study Period



  2017-2028



Base Year



   2020



Forecast Period



  2021-2028



Historical Period



  2017-2019



Unit



   Value (USD Billion)



By Type




  • Blanco

  • Reposado

  • Anejo

  • Others



 By Grade




  • Value

  • Premium

  • High-end Premium

  • Super Premium



 By Distribution Channel




  • On-trade

  • Off-trade



 By Geography




  • North America (By Type, Grade, Distribution Channel, and By Country)

    • The U.S. (By Grade)

    • Canada (By Grade)

    • Mexico (By Grade)



  • Europe (By Type, Grade, Distribution Channel, and By Country)

    • Germany (By Grade)

    • U.K. (By Grade)

    • Spain (By Grade)

    • France (By Grade)

    • Italy (By Grade)

    • Rest of Europe (Grade)



  • Asia Pacific (By Type, Grade, Distribution Channel, and By Country)

    • China (By Grade)

    • South Korea (By Grade)

    • Australia (By Grade)

    • Japan (By Grade)

    • Rest of Asia Pacific (By Grade)



  • South America (By Type, Grade, Distribution Channel, and By Country)

    • Brazil (By Grade)

    • Argentina (By Grade)

    • Rest of South America (By Grade)



  • The Middle East and Africa (By Type, Grade, Distribution Channel, and By Country)

    • South Africa (By Grade)

    • Turkey (By Grade)

    • Rest of ME&A (By Grade)





Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 9.41 billion in 2020 and is projected to reach USD 14.70 billion by 2028.

Growing at a CAGR of 5.8%, the market will exhibit steady growth during the forecast period (2021-2028).

Blanco is leading the type segment in the market.

The growing premiumization trend in spirits is expected to drive market growth.

Diageo Plc, Bacardi & Company Ltd., Proximo Spirits, Inc., and Pernod Ricard S.A. are the key players in the market.

North America dominated the market share in 2020.

On-trade sales are the leading sales channel in the global market.

New product launches and increasing export to various countries are the key market trends driving market growth.

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Tequila Market Size, Share and Global Industry Trend Forecast till 2026
  • Mar, 2021
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