Is global travel retail ready for the building appetite for agave spirits?

By Kristiane Sherry |

Tequila and mezcal sales are soaring in domestic markets. Is it time GTR kept up?

Tequila and Mezcal are two of the fastest growing and most rapidly premiumising spirits categories. Signs are consumers are starting to get a thirst for agave in travel retail, too.

Spirits tastes have changed tremendously in the last three years. Which means retailers chasing a post-pandemic rebound will need to be more attuned to trends than ever before. Step in Tequila and Mezcal.

The agave spirits are shaking up a storm in domestic markets. Evidence suggests Tequila – made with at least 51% blue weber agave in ovens, aged or unaged, with a typically peppery flavour – is capitalising with consumers as the gin wave falls back in saturated markets. Mezcal – crafted from a wide range of agave varietals and cooked in pits for a distinct, smoky flavour – is enticing intrepid epicureans with its broad range of flavours. And while Tequila brands have been the subject of multinational acquisition ventures for years, Mezcal producers are now attracting investor attention. A sure sign that the categories are about to
explode globally.

Data from Straits Research predicts Mezcal will hit a CAGR in excess of 22% between 2022 and 2031, topping out at US$2.1 billion globally. It’s a headline-grabbing stat, and yes, it’s from a small base. But bigger sibling Tequila is flying, too. Research and Markets calculates Tequila will reach US$14.35bn in global sales by 2028, a still flashy CAGR of 5.4%. Factors propelling growth? Significant consumer interest across the US, and that shots are out, cocktails and sipping are in.

Beyond the US

The initial theory was that wherever US travellers went, Tequila sales would follow. But Gebr. Heinemann is already seeing a much more diversified passenger base. “In the Tequila category, Turks (15%), Russians (10%) and Americans (9.5%) are in the top three,” details Purchasing Director Ruediger Stelkens. He notes that there’s increasing demand from EU passengers too, with Dutch, German and Austrian passengers ranking at 5, 9 and 10 respectively. Interestingly, the ranking is similar for Mezcal, although Turkish (30%) and Russian (11%) passengers over-index.

Over the last five years, Tequila comes third behind whiskey and gin when spirits categories are ranked by increased market share. Interestingly, passengers are willing to pay more.

“The share of Tequila sales with shelf prices of €50 and above increased from 17% (FY 2018) to 40% (FY 2022),” Stelkens continues. “Particularly, the proportional change of €100 and above showed a remarkable success, reaching from 0.4% to 8.5%.”

Interestingly, he thinks supply issues when it comes to Tequila might benefit mezcal. “We anticipate that the evolution of the Tequila assortment towards the premium group, and the supply constraints in the Tequila standard group, will lead to a greater recognition of Mezcal products and thus to an increase in demand in near future.”

Mike Dolan says tequila demand is now global

One brand meaningfully investing in the channel is Mijenta. A relatively new player, it launched in 2020 with ex-Bacardi CEO Mike Dolan as co-founder and lead investor. In 2022 it appointed JP Aucher to lead the brand’s TRDF presence outside the Americas – a statement of intent indeed.

“While tequila has not historically been a big player in this channel, we now see increasing demand as the category grows and, in particular, as the premium offerings in the category expand,” Dolan says. He sees interest coming from every region, but is choosing to target Europe, the Middle East and Africa.

“We’re in the midst of an explosion of interest in tequila, and there is growing sophistication among consumers as they become both more informed and discerning about what makes really high-quality tequila,” he continues, referring to the ongoing education piece as the category pivots away from shots. “GTR represents an important opportunity.”

Last year, Patrón partnered with London’s Heathrow Airport for a Day of the Dead-themed activation.

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