Tequila demand ‘is absolutely on fire,’ says Beam Suntory CEO

Japanese-American spirits maker Beam Suntory has made no secret of its interest in buying tequila brands as alcohol drinkers continue to seek out premium spirits.

“There is absolutely no question that tequila is one of the hottest categories right now,” 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.”

Tequila sales in 2021 reached nearly 27 million in the US alone, up from 22.7 million in 2020. That sales volume has been reflected in the growth rate of tequila revenue, which accounted for nearly a third of the increase in the income of 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 turning to those ready-to-drink, ready-to-drink cocktails,” he said. “And within that, of course, we believe that consumers will always pay for quality. So this is a bet that we’re making.”

Younger Tequila Drinkers

Tequila is fast becoming the alcoholic beverage of choice for younger drinkers.

In 2018, people ages 18 to 29 (approximately 45% of all adults) consumed the most tequila in a three-month span among all legal age groups in the US, according to a survey of Statistical.

A resident watches as the bartender pours tequila for a traditional drink called “Batanga”, April 11, 2018. REUTERS/Carlos Jasso

A 2022 survey by Drizly found that when it comes to ready-to-drink (RTD) alcoholic beverages, 70% of Gen Z and 56% of millennials prefer tequila as their spirit of choice.

“It’s becoming more and more popular with young people,” Baladi said. “It’s a matter of discovery. There’s an interesting story like a native Mexican spirit. There’s a wide 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.

“I think that’s played a big part in the last few years in exploding the sport in the United States,” Baladi said.

Tanya is a data reporter at Yahoo Finance. follow her on Twitter.

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