Tequila’s steady long-term growth continues paying off, and the recipe for success appears straightforward. “Take into consideration the secret to having a good quality Tequila is yeast, water, and agave,” says Mike Moreno Jr., co-owner of Moreno’s Casa Tequilera & Liquors in Chicago. “As you see liquor sales as a whole unfortunately slow down, Tequila is still going very strong.”
Education and a diversified consumer base have contributed to Tequila’s growth. Moreno sees more women and African Americans becoming interested in Tequila. Tastings and educational seminars have been keys to category expansion at the retail tier. Moreno’s typically hosts two to six educational seminars a week ranging in price from $20-$100, and at least half of them feature Tequila. “You are getting food, a welcome cocktail, and educated on the product,” Moreno says. “An educated consumer is a good consumer.”
Tequila’s growth, however, may be in the crosshairs of a political battle as it faces possible tariffs that could slow its bull run. “A 10% tariff shouldn’t affect the market that much,” Moreno says. “For the most part, distilleries might try to eat that and hold out until we get a new president who will hopefully retract those tariffs. If those tariffs go up to 25%, it would be detrimental to the fastest-growing spirits category. There are so many bars, restaurants and liquor stores that have shifted over to or are focused on Tequila. The tariffs would hurt the economy, including a lot of small businesses such as myself.”
Boasting approximately 1,000 Tequila and 625 mezcal SKUs, Moreno’s is arguably the largest agave-based spirits retailer nationwide. “Tequila accounts for 40% of my sales,” Moreno says. “When you are drinking Tequila, you’re getting a lot more bang for a buck as far as alcohol quality standpoints go. Tequila has surpassed whiskey and is so close to passing vodka as the No.-1 seller in the country. I don’t see vodka holding on much longer. By the end of this year, I think Tequila will be No. 1.”
Don Julio ($45 a 750-ml. of Reserva Blanco), Centenario ($24 a 750-ml. of Blanco or Reposado), and 100 Años ($12 a 750-ml. of Blanco or Reposado) lead Tequila sales at Moreno’s Casa. “The trend of people buying $100 bottles and up during the pandemic has kind of died,” Moreno says. “With inflation and everything else, consumers are looking for a big bang for their buck. For the most part, people are looking for Tequilas in the $20 to $40 price point for cocktailing.”
Leading mezcal brands at Moreno’s include Banhez Espadin & Barril Moreno’s Edition ($30 a 750-ml.), 400 Conejos Espadin ($32 a 750-ml.), and Derrumbes Oaxaca ($75 a 750-ml.). “Over the years, mezcal has been an extremely large part of my agave sales. I still sell a fair amount of mezcal, but for me mezcal has kind of plateaued,” Moreno says. “A lot of it has to do with over saturation. There are a lot of brands. There are higher price points than Tequila, and there isn’t enough knowledge.”
At Sparrow Wine & Liquor Co. in Hoboken, New Jersey, in-store tastings and hand sales are keys to Tequila sales. “In store tastings are very important,” says store manager and spirits and beer director Laz Luis. “Once the consumer has a chance to sample the product without having to shell out cash, they are exponentially more likely to become a repeat customer for that product if they enjoyed it. Simple person-to-person sales floor conversations with someone I see browsing the Tequila/mezcal section helps win customers.”
Sparrow’s two stores each carry more than 100 Tequila and 40 mezcal SKUs. Top-sellers include Casamigos Blanco ($50 a 750-ml.), Don Julio Blanco ($50 a 750-ml), and Espolón Blanco ($30). “The growth of Tequila’s popularity is driven by the consumer’s understanding that it’s a uniquely expressive spirit encapsulating the essence of the land it derives from, exactly how grapes do for wine,” Luis says. “As a result, the consumer has a whole library of flavors to discover. When someone discovers something new that they really enjoy, naturally they will tell their friends. Word of mouth is powerful, and social media magnifies its power.”
Mezcal sales at Sparrow are led by Banhez ($32 a 750-ml.), Dos Hombres ($60), and Quiéreme Mucho Espadín ($60). “Mezcal has a seemingly endless amount of agave species with vastly different flavors, coupled with the traditional earthen pit smoking of the agave, Mezcal is more robust and complex than Tequila and can scare off a new consumer who isn’t ready,” Luis says. “The more subtle flavor profile of Tequila allows the consumer to gain understanding of Blue Weber agave and its various expressions.”
Although Tequila faces tariffs, the category is a force of nature anticipated to continue ascending. “Potentially tariffs may make the average consumer wait a little longer before buying a premium product, slowing down sales in the current $40-$60 range,” Luis says. “Well-off consumers will always get what they want if money is no object.”