Japanese-American spirits maker Beam Suntory hasn't hidden its interest in buying tequila brands as alcohol drinkers continue to seek out premium spirits.
“There's absolutely no doubt that tequila is one of hottest categories at the moment," Albert Baladi, CEO of Beam Suntory, told Yahoo Finance Live (video above). "It is attracting multicultural consumers, younger consumers. It is absolutely on fire. We see it everywhere."
Sales of tequila in 2021 reached nearly 27 million in the U.S. alone, up from 22.7 million in 2020. That sales volume has been mirrored in the revenue growth rate of tequila, which accounted for nearly a third of the increase in revenue for the spirits industry. Between 2020 and 2021, tequila had the highest revenue growth rate of 31%, according to the Distilled Spirits Council.
According to Baladi, there are two global trends the industry is seeing right now: premiumization and convenience.
"Consumers are moving to those ready-to-drink, ready-made cocktails," he said. "And within that, of course, we believe that consumers will always pay for quality. So this is a bet we're making."
Younger tequila consumers
Tequila is quickly becoming the alcoholic beverage of choice for younger drinkers.
In 2018, people aged 18-29 — roughly 45% of all adults — consumed the most amount of tequila in a span of three months among all legal age groups in the U.S., according to a survey by Statista.
A 2022 survey by Drizly found that when it comes to ready-to-drink alcoholic beverages (RTDs), 70% of Gen Zers and 56% of millennials prefer tequila as their spirit of choice.
"It is becoming increasingly popular with young people," Baladi said. "It's a question of discovery. There's an interesting story as a Mexican native spirit. There's great variety of tequila."
On top of that, he added, is the celebrity factor. More celebrities are cashing in on the tequila business in recent years including Dwayne "The Rock" Johnson, Nick Jonas, Kendall Jenner, Michael Jordan, and Rita Ora.
"That has played a big role, I think, over the last few years in the explosion of the category in the U.S.," Baladi said.
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Tanya is a data reporter at Yahoo Finance. Follow her on Twitter.
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