Diageo Global Travel (GT) has experienced a rapid expansion of its Tequila sales in the travel retail channel, with revenue “more than tripling” over the last two years.
Speaking at the recent unveiling of a Don Julio 1942 pop-up at Heathrow Airport, Diageo GT managing director Andrew Cowan confirmed the performance of the agave spirit.
While he acknowledged that the category remains “a small part” of his business, he seemed delighted by its development.
“[Sales] have tripled in the last two years, and doubled in the last year,” he stated. “And I think that growth was restricted because we didn’t have full availability of products.”
Cowan maintains that full availability has yet to be established across the world, “so we don’t see that growth is slowing down.”
He stressed that he is seeking to grow the Tequila category “dramatically” during 2023.
Diageo Tequila sales strategy
Speaking at the event, Cowan outlined his strategy to continue to grow Tequila sales throughout global travel retail.
“I think we need to do three things,” he opened. “We need to make it available. We need to take the brand world to the point of purchase which is what we’re trying to do today. Not just the high tempo, also the authenticity story.
“And I think we need to teach people how to drink it.” He acknowledged that the broader growth of 100% blue weber agave Tequila over mixto varieties was driving premiumisation.
Cowan also noted the broad appeal of the category. “I think the lines are blurring, older, younger.
“I do think I do think tequila as a category is just way more democratic than you know, your Traditional Scotch drink.” Despite efforts to the contrary, many consumers still view Scotch as an ‘older’ and ‘male’ drink. Tequila does not carry the same drinker stereotypes.
Earlier this month, Diageo revealed that its full-year 2023 net sales climbed 10.7% to £17.1 billion. The company’s global travel retail sales growth rate tracked “materially ahead” of local market performance, according to Cowan.