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StateWays | www.stateways.com | May/June 2017 34 TEQUILA | CATEGORY UPDATE BUILDING A BASE Numerous brands fi rst enter the U.S. market with a blanco ex- pression, either to build the brand's reputation fi rst through the most popular form of tequila while waiting for stock to age, or because of marketing decisions. In the case of Pernod Ricard's Altos brand, establishing the connection with the bartender community fi rst was paramount. Altos was developed by two English bartenders to be a high quality, well-priced brand, and the main focus was on blanco before developing and releasing an añejo expression. And keeping brands within a portfolio distinct is also a growing concern, as suppliers add multiple tequilas. "Tequila Herradura's marketing efforts are focused on production and superior quality, by telling its tequila-leadership stories and touting its gold medal award-winning spirit," Simmonds says. "And el Jimador is focusing efforts on the camaraderie of en- joying tequila, and positioning itself as a lifestyle brand in the premium space." For newer brands, keeping up with how suddenly popular they have become is a real issue. Moll, in charge of Tequila Espolon, is happy with the success. "Tequila overall is on fi re, and in only fi ve-and-a-half years in the marketplace, Espolon just surpassed 200,000 cases. Espolon offers a high-quality tequila at a very acceptable price point. That's certainly been a key factor to success. Secondly, we also offer a fresh and compelling take on Mexican culture, tapping into consumers' desire for authentic brands and stories." For Espolon, that's particularly clear in its Dia de los Muer- tos design and iconography, which has gone a long way to help the brand stand out on the shelf. And like other brands, extending the selection has helped drive sales. Last year Cam- pari released Espolon Añejo X, a limited edition six-year-old extra añejo that is said to be a result of a fortuitous discovery of aged stock by the brand's distiller. And perhaps doubling down on the brand's reputation for affordability, Espolon is releasing a 1.75-liter size for blanco and reposado expressions this spring. MANAGING GROWTH How retailers manage this growth is also a concern for mar- keters, as shelf space is in such demand from the explosion of brands in all categories. Reejsinghani says she's been noticing how shelf sets for tequila have exploded and that retailers tell her they expanded well beyond national brands. "They tell me that many of the newer brands are selling because people com- ing in are looking for something new and unique," she adds. "There's a huge opportunity in the off-premise, even though Altos was created by two bartenders for the on-premise." Hurtuk says opportunities abound for tequila, and its growth prospects certainly look rosey. "The most exciting and energiz- ing aspect of the growth in the agave spirits space, in my opin- ion, is that you're seeing a lot of new and non-traditional tequila drinkers coming into the fray through cocktails, craft spirits or even whiskey," she says. "Bartenders have certainly embraced agave spirits overall, so in markets where there is a mature or burgeoning craft cocktail scene, you're sure to fi nd some ad- vocates on the other side of the bar. We are defi nitely seeing a younger demographic who are embracing the category, along with other premium spirits segments." While the looming issues between the U.S. and Mexico, regarding immigration and the potential levy of taxes on im- ported Mexican goods looms large, few companies would com- ment on hypothetical reactions. Pernod-Ricard's Reejsinghani points out what most in the industry already know. "As a whole we are concerned about the possible border adjustment tax and know that it wouldn't be good for consumers, and we've expressed our concerns through the Americans for Affordable Products [a lobbying and interest group] to ask Congress not to do it." While tequila prices have crept up, especially as some brands set themselves up as luxury spirits, any large price in- crease would present a challenge. But if nothing else, as tequila quality has improved, Americans have proven they are willing to pay more for what is rapidly becoming one of their favorite spirits. It's a trend suppliers and retailers count on, whatever the political climate. • JACK ROBERTIELLO is the former editor of Cheers magazine and writes about beer, wine, spirits and all things liquid for numerous publications. More of his work can be found at www.jackrobertiello.com.