Celebrity tequila vs small craft brands: an ‘ultra premium’ battle
Rock stars, movie stars and athletes have a long history of business partnerships with alcohol brands, whether it’s a traditional endorsement deal or building a private company from the ground up. But there’s been an upswing in tequila launches over the last five years, thanks in part to George Clooney.
Casamigos launched in 2013 in the US and was co-founded by Clooney, who leveraged his personal brand of mega-celebrity to market the tequila. Social media posts and endorsements from his famous friends propelled the brand to a $1bn valuation when it sold to Diageo in 2017.
Now others are trying to find the same success in tequila. NBA all-star Michael Jordan recently launched Cincoro Tequila with four NBA team co-owners; while actor and musician Nick Jonas launched three varieties of tequila under his new brand Villa One.
Justin Timberlake also has Sauza 901 Tequila, Dwayne ‘The Rock’ Johnson has been developing Mana Tequila for several years and the Backstreet Boys have teased plans for their own tequila brand.
Elevating boutique brands
But the question is whether the trend can sustain, or replicate Casamigos, particularly against the competition of craft tequila. SipTequila, a new online tequila store that specializes in high-end, premium brands, told BeverageDaily that celebrity brands have to compete against the high quality of small boutique labels found in the US market.
SipTequila works as ‘springboard’ for the distillers that don’t have the distribution power of mainstream brands, and said that consumers respond to the platform because they are looking for a more premium and personalized experience in spirits.
The company handpicks each tequila sold on the website, usually about 30 at a time. Hannah Lewis, co-founder of SipTequila, told BeverageDaily that they don’t carry any celebrity tequilas, and most are classified as premium rather than super or ultra premium.
“The biggest driver is that they don’t need us. A lot of these celebrity-endorsed tequilas have big marketing budgets and they’re going straight into broadline distribution with a major player,” she said.
A straight-sipping tequila health halo
The category of tequila that SipTequila carries is similar to craft beer or wine, Lewis noted. It is coming into its own as a straight sipper with different tequila varieties and distillation methods. There are a few main criteria to follow for determining the quality of tequila that SipTequila uses.
Tequila is only as good as the agave that is put in, Lewis said, whether state-owned or grown by the same people or at the same location where it’s produced. Agave is farmed all over Mexico, and many big brands buy and contract their supply.
SipTequila usually partners with growers and distillers that grow their own agave, so Lewis considers it more controlled from start to finish, or like farm-to-table for tequila.
The size of the distillery is also crucial, and SipTequila sees a significant difference in the quality of tequilas from smaller, craft distilleries rather than major factories that run production on dozens of tequila brands at once.
“Production size ultimately comes through in the quality of the product, and it adds to the uniqueness,” Lewis said.
Another factor in tequila’s popularity has been its ‘health halo,’ according to Lewis, who said some consider it ‘the cleanest alcohol you can drink’ because of how it's produced and that the sugars in it are all natural.
Celebrity brands boost tequila buzz
Consumers are drawn to tequila because other straight-sip spirits like bourbon and scotch have grown fast with depleting inventory. Their price point is only getting higher given the demand and the amount of supply available, Lewis noted.
“I think you’re starting to see category switchers and category shifters, people that are looking for other sipping alternatives. Once you’ve been exposed to tequila, you realize how similar a tequila sipping experience can be to a bourbon or a scotch,” she said.
Overall, SipTequila considers the industry ripe for innovation, and can take cues from mezcal’s path in the US and wider portfolio variety. Tequila is getting the new buzz from celebrity brands, but Lewis thinks that each one must bring something unique to the category for them to stand a chance at sustained success.
“If it’s a celebrity that you want to be like or you respect and trust their judegment, you might be more apt to try a product that they sign off on,” Lewis said.
“Most people will try something once if your product is less than $100. But if the product itself doesn’t match that expectation, they’re probably not going to buy it twice.”