El Rayo, a Tequila company operating in the UK, has partnered with Sainsbury’s to secure its first-ever listing at a major supermarket.
With its inception in 2019, El Rayo will now offer its Plata expression in 400 Sainsbury’s stores throughout the UK, priced at a recommended retail price of £34.95 ($43.55). Notably, this Tequila will be the first at the supermarket to exceed the £30 mark, according to El Rayo. The Plata variation is marketed to be consumed with tonic water, resembling the consumption of gin.
“There’s plenty to do there. We’ve only launched one SKU with them so obviously, it’ll be great to get a second SKU,” Co-founder Tom Bishop said regarding the partnership with Sainsbury’s.
“So, I think for us, the main message is just absolutely knock it out of the park with Sainsbury’s this year and see where that takes us.”
Bishop has outlined El Rayo’s plan for the upcoming year, emphasizing the significance of on-trade sales for the company.
“In terms of growth, those [on- and off-trade] are the two big focus channels for us – a combination of launching with Sainsbury’s and increasing distribution in the on-trade, both from a volume perspective but also from a footprint perspective.”
Additionally, El Rayo has recently introduced its products to Hammonds, a northern England-based beverage wholesaler, as well as two other wholesalers in Scotland. The Tequila brand is now available in more than 500 on-trade locations.
According to Bishop, El Rayo is currently offered through Amazon in Germany and via online retailer Tastillery outside of the UK. However, there are currently no definite plans to expand into additional international markets in the near future.
Regarding the concerns of high agave prices and potential supply chain disruptions within the rapidly growing Tequila market, Bishop mentioned that El Rayo has not been severely impacted.
“It’s been a challenge. I don’t think anyone in the Tequila category will tell you differently and, if they are, they’re probably lying,” Bishop said.
“It’s a challenge we’ve managed quite nicely as a brand. We probably came in at quite a nice time. I think there’s already been quite a significant increase, so, we could position the brand from a price perspective accordingly. And I think we’re probably not at the size where we’re massively overexposed.”
Bishop added, “Who knows what the next 12 months hold? I’m not going to sit here and say that it [price point] is set in stone because I don’t think anybody can but, at the moment, we’ve been able to resist any price increases, which potentially is not the same for every other brand, but we just feel quite passionately about our price point.”
At the start of this year, Bishop and co-founder Jack Vereker obtained an investment of £870,000 and suggested that the company may seek additional funding around the same time next year.
Based on a report by GlobalData, it is anticipated that the Tequila and mezcal industry in the UK will experience a compound annual growth rate (CAGR) of 4.3% from 2021, leading to a market value of £142.7m by 2026.
