Tequila Sales Are Outpacing Vodka

Food & Drink

Vodka has had a significant hold over the American drinker for decades. It has remained one of the largest spirit categories in the country, fueled by martinis, cosmopolitans, espresso martinis, and numerous other craft cocktails. Brands like Ketel One, Absolut, Grey Goose, Tito’s, and Belvedere are ordered by name and often at a premium.

Now, tequila is coming for the throne. CGA by NeilsenIQ, a provider of on-premise insights in the beverage world, has noted that tequila’s growth is outpacing vodka’s in the on-premise.

While whiskey and vodka are still the two dominant spirits categories consumed in the on-premise setting, tequila is the only category of spirits that has grown over 1% in the last year to date. Tequila sales now make up 18% of the entire spirits category.

Breaking down tequila’s popularity in certain states, tequila makes up 14% of spirits volume in California, while vodka commands 9%. This is a 24% higher change in volume growth compared to vodka versus a year ago.

In Texas, New York, and Ohio, the two categories are neck and neck, with each representing 6% (Texas) and 5% (NY, Ohio). In Texas, tequila grew by 18% compared to vodka. In New York, the agave category grew by 17%.

Florida is still a vodka stronghold — vodka accounts for 14% of shares there, compared to tequila’s 12%. But tequila’s highest growth in volume happened in Florida, where the category grew an impressive 48% compared to last year.

ResearchandMarket.com anticipates that the global tequila market size will reach $14.35 billion by 2028, expanding by a CAGR of 5.4% over that period.

Tequila has been growing increasingly over the last few years, driven by everything from the continued popularity of the margarita to a growing interest in sipping tequila. The margarita is the most popular cocktail by value velocity across 43 of the 48 states. A recent report by CGA by NielsenIQ found that in the premium category, tequila sales are outpacing higher-end brown spirits, as American drinkers start sipping aged tequilas.

“Over just the last 12 months we’ve seen Tequila significantly grow its share of the Spirits category, with a lot of that growth being driven by Cocktail serves and the popularity of the Margarita,” says Matthew Crompton, regional director of North America for NielsenIQ. “However, to continue its growth, the category will need to innovate and explore new opportunities within serve style and price tiers – with premium tiers in particular showing significant growth.”

The data was pulled using NielsenIQ’s OPM (on premise) data. OPM works with leading beverage suppliers to track shares, trends, and sales performances in bars and restaurants across the country. Measurements include four sub-channels (casual dining, fine dining, bars, and nightclubs) and tracking of premium brands.

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