Tequila isn’t only for Cinco de Mayo. The spirit is a household favorite with U.S. consumers and its popularity keeps rising, thanks in part to new packaging and convenience.
U.S. consumption of tequila has grown more than 40% over the past five years and the popular drink doesn’t appear to be losing its appeal. Tequila tends to be more popular as an on-premise drink than other spirits. However, with pandemic regulations shuttering bars and restaurants across the country, off-premise tequila sales have been strong enough to make up for on-premise losses.
Tequila and agave-based premium canned cocktails are the newest wave of ready-to-drink beverages hitting the market. Based on their popularity, they have the potential to transform the way consumers drink tequila.
The Margarita, a cocktail made with tequila, lime juice and triple sec or orange curacao, is consistently ranked the most popular cocktail in the U.S., according to Nielsen data. 56% of consumers choose margaritas when ordering at the bar.
RTD Margaritas
Consumers frequently reaching for ready-to-drink (RTD) versions of the beloved cocktail that can be enjoyed at home or at away-from-home activities. Cutwater, FIVE Drinks, Two Chicks, and Post Meridiem are just a few of the brands experiencing success with their canned margarita cocktail lines. Delta Airlines even recently introduced Tip Top canned margaritas to passengers as part of their updated in-flight menu.
The full-strength margarita launched by Post Meridiem features real lime juice. Coming in at 27.5% ABV in a handsome compact package that contains about 3-1/3 ounces of premixed cocktail. That’s about the same as drinking a 12 ounce can of Truly Extra.
The differentiator for a good margarita is real ingredients and the right portions. PM uses silver tequila, orange curacao, and 100% real lime juice.
“No matter how functional a beverage is, taste is king,” said Andrew Rodbell, co-Founder of Post Meridiem Spirits in an interview with Hard Seltzer News.
Hard Seltzers with Tequila
Hard seltzers are also exploring tequila. Tequila brands like Hornitos, which launched Hornitos Tequila Seltzer in April, are looking to capitalize on the popular taste combination while offering a lower calorie and lower sugar alternative to the classic margarita. Hornitos Tequila Seltzer contains less than 115 calories per can whereas a classic margarita contains upwards of 200 calories per serving and a frozen margarita can contain more than 500 calories.
Jose Cuervo also recently launched Playamar, a tequila-based line of hard seltzers.
“The tequila and ready-to-drink cocktail segments are two of the fastest-growing segments in the spirits category right now, with hard seltzer retail sales up 225% in the last year alone,” states Managing Director of Tequila at Beam Suntory (Hornitos parent company), Rashidi Hodari.
It is worth noting that blue agave, tequila’s base ingredient, offers a tequila-adjacent flavor profile and has become an equally popular addition to canned cocktails and hard seltzers. Founders Más Agave Premium Hard Seltzer, which launched earlier this year, is made with organic blue agave and Cacti, rapper Travis Scott’s tequila-inspired seltzer line, contains “100% premium blue agave from Mexico.”
“Over the past five years, 100% blue agave products have exploded as the dominant product attribute consumers seek. Tequila production is regulated, however, so there are limitations. Most brands have focused on developing higher-quality products as well as unique elements in finishing or aging,” states the IWSE Research Director for North America, Adam Rogers.
The Entry of Ranch Water
The revival of the Ranch Water cocktail, a West Texas favorite, is yet another trend adding to the canned tequila and agave-based cocktail craze. The classic cocktail is traditionally made with Topo Chico Mineral Water, lime juice and tequila. Brands like Shotgun, Lone River and Dos Equis all have lines of canned Ranch Water on the market.
“When we introduced Ranch Water to the hard seltzer category in 2019, we never expected to see the classic flavor gain so much traction in less than a year,” said Shotgun co-founder Brad Foster.
Even Coca-Cola, which recently launched Topo Chico Hard Seltzer, announced they have a Topo Chico Ranch Water in the works with their distribution partner Molson Coors.
“Keep a look out for premium tequila-based prepared cocktails as the next iteration, as demand for canned cocktails soars,” Adam Rogers suggests.
Premium canned cocktails and ready-to-drink beverages have changed the way consumers buy alcohol. Crafting canned cocktails with in demand spirits like tequila allows brands to create more sophisticated ready-to-drink beverages while giving consumers a new way to enjoy their favorite flavors.
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