How Premium And Craft Spirits Are Changing The Industry

Tequila is experiencing an unprecedented surge in sales, eclipsing both American whiskey and, most recently, vodka in sales at U.S. bars and restaurants this year.

According to The Spirits Business, this upward trajectory is due to a combination of factors that range from consumer interest in quality spirits to the versatility of tequila itself. Tequila’s rise reflects a broader shift in consumer preferences as more people explore agave-based spirits, discovering the breadth of flavors and expressions available.

In 2023, tequila sales in the United States reached approximately 31.6 million 9-liter cases, according to Statista. This marks consistent growth since 2004, when sales were around eight million cases, with volumes rising steadily each year.

One key driver behind the spirit’s success is its growing wide appeal.

“I think the range that the tequila category offers is really appealing to a variety of different drinkers,” Resa Mueller, a bartender at R&D, a cocktail bar in Philadelphia, said via email. “Whether you like an aged spirit or a clean, more neutral spirit, tequila can provide something for everyone while offering a distinct flavor profile.”

This ability to cater to different tastes has helped tequila move beyond its early reputation as a party spirit consumed in shots.

“I think that the most common misconception about tequila is that it’s a ‘party’ spirit, where in reality, high quality tequilas are actually meant to be sipped and savored, much like a fine glass of whiskey,” said Gina Castillo Oghene, director of brand advocacy at El Tequileño. “The aged, complex flavors of tequila are best appreciated slowly and attentively.”

Castillo Oghene highlighted how the market has shifted towards premium, craft tequila. Tequila has seen 1,270% growth in higher-end, premium brands since 2003, and 1,500% growth in super-premium brands in that same time frame, according to the Distilled Spirits Council.

“The premiumization of the category has significantly increased consumer interest in the spirit as the public is more interested in consuming high-quality, craft tequila,” Castillo Oghene said. “Additionally, there’s a profound interest in Mexico’s heritage, and as tequila is so interwoven into Mexico’s history, it makes sense that so many people are drawn to the spirit.”

Bartenders and experts in the industry agree that the spirit’s versatility has also been a significant factor in its growth. Whether used in classic cocktails like the margarita or paloma, or experimented with in modern takes on drinks traditionally made with other spirits, tequila’s unique flavor profile opens the door to innovation.

“Tequila is extremely versatile and pairs perfectly in both classic and modern cocktails, which has definitely helped it find a place with bartenders and consumers alike,” said Castillo Oghene.

Tequila’s production process also plays a role in its rising popularity. Unlike many spirits, tequila is inherently terroir-driven, meaning the plant from which it is made—agave—expresses the characteristics of the soil and climate in which it grows.

“Tequila is special because it’s made from the agave plant, which has incredible depth and complexity in terms of natural flavors and aromas,” explained Natasha Sofia, global advocacy director for Mijenta Tequila. “Like with grapes, terroir is fundamental in shaping the taste profile of the plant.”

Sofia further explains that tequila’s unique appeal comes from its balance between clear and aged expressions, making it accessible to both vodka and whiskey drinkers. “For whiskey drinkers, they’ll find some familiar barrel notes in a reposado or añejo but with the added complexity of the agave,” she said. “For vodka drinkers, a blanco or cristalino are both clear expressions, and as tequila has grown in popularity, I’m seeing more bars using tequila in cocktails that would ordinarily include a clear spirit like vodka or gin.”

The growing appreciation for tequila has also led to increased attention to quality and sustainability in production. Mueller pointed out that the agave plant, which takes between seven to ten years to mature, requires careful cultivation. “The importance of drinking tequila made by a producer who puts time and effort into honoring the plant as well as the tradition behind the spirit becomes really important because of this.”

Producers have responded to consumer demand for higher-quality tequila by focusing on artisanal production methods. Castillo Oghene said that there has been a noticeable shift in the market. “Consumers have shifted towards more craft tequilas seeking a more authentic sipping experience, which is why El Tequileño and other high-quality distilleries have such a growing following,” she noted.

However, the rapid rise of tequila has not been without its challenges. As Sofia acknowledged, the increased demand has also led to the proliferation of lower-quality tequilas that rely on additives to mask subpar production methods.

“The end result of some of the techniques they deploy is a spirit that would not be palatable, so they resort to additives like flavored sugar syrups to mask the issues with the process,” Sofia said. “That’s why there are so many big volume brands that taste like vanilla cake, which is not what an agave tastes like.”

Looking ahead, experts foresee continued innovation in the tequila industry, particularly in terms of production techniques and new expressions. Castillo Oghene predicted that sustainability will become an even bigger focus as producers experiment with aging techniques to create new products. Mueller echoed this sentiment, noting that tequila’s popularity will allow producers to explore the boundaries of the spirit.

“The growth of agave is so dependent on the land and climate, and the better the agave grows, the better the resulting tequila,” Mueller said. “I’d love to see more single-estate expressions that demonstrate the breadth of the terroir that finds its way into the bottle.”