– DAN BUTKUS , CEO AND PRESIDENT OF SANTO tier trailed in performance versus the rest of the category in 2023 , and we think this is something that continues into 2024 .”

Preliminary data from The Beverage Information Group , the data partner of Beverage Dynamics magazine , shows tequila at between 5−7 % growth last year . Category leaders Cuervo and Patron each shrunk around 2 % — further evidence of leveling off .

TEQUILA TRENDS IN 2024

Which is all to say that while the numbers may not jump off the charts anymore , tequila will remain a growth driver this year . So what can we expect from this category in terms of trends ?

Premiumization has been the dominant story in tequila ( and much of the alcohol industry ) for the past decade . While customers will continue reaching for top-shelf bottles , Moreno does see some pullback . Why ? Macro reasons , coupled with a

touch of category overexpansion .

“ Economically , many consumers feel iffy or weary about the potential for a market crash in 2024 ,” Moreno says . “ I have noticed that more consumers have been buying down . Not the cheap stuff . But all of a sudden , we have all these extra anejos , anejos and even reposados priced between $ 200 and $ 400 . We ’ ve never seen those prices before . I think the customers are more comfortable with the $ 50 to $ 100 price point .”

Perhaps the two biggest trends in tequila today are celebrity-launched brands and “ additive free ” products . Combining these two elements is Santo Tequila , from Sammy Hagar and Guy Fieri .

“ There can be a backlash to celebrity tequila brands ,” says Dan Butkus , Santo president and CEO . “ Some [ celebrities ] don ’ t even drink the tequila first and put out products filled with additives . We had considered shying away from the celebrity focus , but felt that our celebrities truly engaged with the brand .”

It helps when the team is Hagar , a pioneer of celebrity alcohol brands , and Fieri , who has launched a number of successful food and beverage brands himself . Authenticity is everything when tying a product to a public star . The story and quality must match the fame .

For instance : Santo focuses on additive free . The Tequila Regulatory Council , the category ’ s governing body , allows 1 % of any agave spirit to consist of additives , without any notice on the bottle ' s label . Many brands that use 0 % additives are now advertising this fact prominently on their packaging and marketing .

“ You have a greater number of people now looking for true tequila taste ,” Butkus explains . “ Additive free will become the dominant subcategory .”

This is a turn from some practices during earlier stages of the ongoing tequila boom .

“ When we were having the agave shortage problems , people were sourcing younger and younger agave products ,” Butkus says . “ The cost of agave was also going up . As tequila was

8 StateWays • Spring 2024 www . stateways . com