To tell the story of the world of tequila, which by the way should always be treated as masculine, as the Accademia della Crusca also explains, history cannot be ignored George Clooney and from Casamigos. We are in 2013, when a Hollywood star along with Rande Gerber AND Mike Meldannightlife entrepreneur and husband Cindy Crawford the former, the latter a real estate developer, decide to found what will soon become the most famous blue agave distillate in the United States: Casamigos. As a result, four years later, three friends are selling their creation Diageo for seven hundred million dollars (then 623 million euros) plus another three hundred million bonuses (263 million euros). Sensing a deal to distill Mexico’s most famous product, everyone dove headfirst into it, with mixed results. Actors like it Dwayne Johnson, Arnold Schwarzenegger, Kevin Hart AND Sam Heughan. Singers like it Rita Ora AND Sammy Hagarmodel Kendall Jenner and even Michael Jordanwho every year has to think about what to do with the fees received from him Nike ($250 million in 2022). Of course, scrolling through the list of famous producers, you can see that it’s all stars and stripes. Because the US, even more than Mexico, at least broadly speaking, is the market that absorbs by far the majority of production.
TEQUILA FAST FAST, EVEN FROM LVMH
Production that is forInternational Wine and Spirits Research (Iwsr) in 2022 its value reached $10.4 billion (about 9.6 billion euros), and by 2029 it is estimated to exceed 15.5 billion at a compound growth rate (CAGR) of 5.89 percent. Therefore, it is no coincidence that in 2017 even such a giant as Moet Hennessywines and spirits division Lvmh, which closed at 7.1 billion euros in 2022 alone with an operating profit of 2.2 billion, has decided to go public. For this he chose tequila Volcano De Mi Tierra by signing a partnership with the Gallardo family: one of the oldest and most influential in the Jalisco region, that is, home of the blue agave. “In 2022, according to our forecasts and less than three years after the official launch in Italy, Volcan De Mi Terra conquered the ultra-premium podium, finishing third with a segment share of 11 percent,” he said. Pambianco Wine and Food Flavia Di Giustino, senior brand manager for the spirits portfolio at Moët Hennessy Italia. And all this in the context of a market that, as the manager emphasized, “represents our reference arena and which recorded +71% in 2022, compared to category growth of +30 percent.” What is certain is that, as Di Giustino explained, “it is still a very small segment, with approximately 75 thousand liters, or 5.2% of the total volume consumed, but with noticeable growth prospects.” Even smaller, but more attractive for the classic LVMH target, is the prestigious segment, that is, the one that costs a thousand euros per bottle, in which “Volcan De Mi Tierra” with Volcan XA appeared in the world a couple of years ago and from 2022 in Italy, which amounts to only 0.1% of the total, but is expanding rapidly and sees Italy as one of the most strategic markets.”
HOW MUCH DOES ITALY COST?
With full respect to the great secrets of production and value, jealously guarded by both large drinking holdings and small producers, looking at the data provided Tequila Regulatory Council It turns out there’s a real tequila connection going on in Italy. This is due to the fact that, according to data published by the Mexican organization, Italy at the end of 2022, with a growth of 103% of approximately 4.2 million liters, rose to eighth place among destinations at the international level. This figure doesn’t even compare to the more than 300 million liters that end up in the United States, but marked a noticeable increase in the first half of 2023. Thus, looking at the first half of the current financial year, we find that Bel Paese, with imports of 2.7 million liters, has moved up another two positions to take sixth place. The pace is always dictated by the USA with 165.5 million liters, followed by Spain with 6.3 million, Germany with 5.8 million, France with 4.1 million and the UK with 4 million, while Canada with 2.5 million and Australia with 2.4 million liters were surpassed. These data, however, relate to exports and therefore to sales (sale to a commercial intermediary), so they are very different from the data processed and disseminated by the International Wine and Spirits Study, which instead relates to consumption and indicates that In 2022, 1.4 million liters of tequila will be drunk in Italy. This figure, as Flavia Di Giustino emphasized, “tells us: yes, the market is still relatively small compared to gin and vodka, with the latter exceeding nine million liters.” . However, growing market demand and resulting business growth make tequila one of the most popular categories at the moment, given that last year consumption grew by +30% compared to 2021 and even +47% compared to Happy 2018.” And all this without considering that the tequila phenomenon has not yet begun in entry-level product categories, that is, those that, once revitalized, will be called upon to generate more quantity than value.
It is therefore no coincidence that large companies in the alcoholic beverages market acted on the acquisition front, without caring about savings. Because in addition to the LVMH project with Volcan De Mi Tierra and Diageo with Casamigos, the most sensational coup in 2018 was made by Bacardi Limited with the acquisition Patron Spirits International with an enterprise value set at approximately $5.1 billion (then approximately €4.5 billion). The figures have never been official since the Cuban group was founded in 1862 as a family holding company based in Bermuda, but it is more than likely given that it has served as the world’s top-selling premium tequila, with production estimated at around 3 .5 million pieces. nine liter boxes (about 30 million liters). Moreover, Diageo spares no investment. In the period 2021-2023, the British group has planned an investment of 500 million pounds (583.3 million euros), 160 million of which is earmarked for the construction of two new distilleries in the state of Jalisco, and a further 123 million used for the acquisition of super-premium flavored tequila in 2022 21Seeds. The strategy is supported by the market, which saw the sector grow by 15% in the last financial year and Casamigos by +14%, to approximately 2.4 million estimated cases (approximately 20 million liters), and Don Julio +13% for approximately two million boxes (about 17 million liters). This is estimated to equate to sales of more than £1.5 billion (€1.75 billion) of the total 17.1 billion (around €20 billion) accumulated in 2023 by the London-based group. In addition, if we consider Italy, the Campari group is investing, which invested almost 1.6 billion euros in the first half of 2023 and already owns Espolon AND Cabo Wabowhich released a new ultra-premium tequila, Blanco, last April. Mayenda. The Milanese group has in fact decided to spend a significant portion of the 45.2 million euros invested in Mexico in six months on expanding its tequila supply chain.
AGAVE AND THE FUTURE
Therefore, if the market is constantly growing, and it will grow even more as the trend towards tequila sales extends to market access areas outside of Mexico and the US, the only real concern would be a specification that mandates production in only five states. Mexico and, above all, and therefore from the cultivation of agave, which requires seven to fourteen years before it reaches maturity and is ready for the production process. A signal in this direction appears to be coming as early as 2023, when, according to total production data published by the Tequila Regulators Council itself, tequila production this semester showed higher volume than last, but with a clearly higher growth rate more limited . For production that reached 322.9 million liters compared to 315 million in 2022, but at a slower pace if we look at 260 million liters in 2021. Whether the level of production has already been reached will be known in two years, when Mexico will have to exceed the level of 651.4 million liters in 2022, which was 527 million in 2021 and 374 million in 2020.