Tequila used to be synonymous with the end of a party, marked by the familiar three-step ritual: salt, shot, and lime. But times have changed. This agave-based spirit is now enjoyed in diverse ways: neat, over ice, with soda, and as a key ingredient in various cocktails beyond the classic margarita. As a result, it’s become the fastest-growing segment in India’s alcohol market, despite starting from a relatively small base.
Tequila sales in India increased to about 123,000 cases (nine litres each) in the last calendar year from 68,200 cases in 2022, as reported by company executives and based on data from global alcohol market analysts IWSR. In fact, sales have more than tripled since the pre-pandemic period, when 38,950 cases of agave-based spirits were sold in 2019.
“A few years ago, tequila was practically nonexistent; nevertheless, it has since become quite popular. According to Hina Nagarajan, MD of United Spirits, which recently invested in the regional agave-based spirit company Pistola, “it has been one of the most rapidly growing white spirits in the world since COVID.”
Continue Exploring: United Spirits acquires 15% stake in alcohol beverage brand Pistola
Tequila stands as the foremost favored rendition of the spirit derived from the agave plant, indigenous to Mexico. Following closely are its counterparts like mezcal (or mescal) and pulque. The assortment of agave-based products in India has surged from just under twelve in 2020 to nearly thirty-six presently, featuring recent debuts like Diageo‘s Don Julio and Kendall Jenner’s 818.
Tequila’s Appeal to Millennials: Cocktails, Trends, and Accessibility
According to companies, the spirit’s adaptability as a cocktail ingredient and its widespread availability in restaurants have contributed to its popularity among millennial drinkers, buoyed by increasing disposable incomes.
“It’s a drink that blends easily and carries a youthful, trendy vibe that’s all the rage these days. This spirit is gaining momentum worldwide, and Indians are catching on as trends spread. Yet, the main hurdle remains its price point; being crafted from 100% agave, it falls into the premium category, making it less accessible compared to other spirits,” remarked Minakshi Singh, co-founder of Cocktails & Dreams in Gurugram and SideCar in New Delhi.
Celebrity Influence and Branding: Tequila’s Global Reach
Numerous international icons like Dwayne Johnson, George Clooney, Justin Timberlake, Adam Levine, and Nick Jonas have either put their money into or created tequila labels. In India, identifying significant factors propelling tequila’s growth beyond its nightlife appeal has been challenging. However, with the introduction of fresh brands and a surge in home consumption, the accessibility and popularity of tequila have soared, marking a notable expansion in its market presence.
Continue Exploring: Kendall Jenner’s 818 Tequila debuts in India with exclusive Delhi-NCR launch
“At a broader scale, tequila is undoubtedly gaining ground from the whiskey segment, which, being on a larger base, has reached its saturation point,” stated Kunal Patel, CEO and Managing Director at Monika Alcobev, the leading tequila distributor in the country, importing renowned brands such as Jose Cuervo, 1800 Tequila, and Creyente. “Initially, there was skepticism among restaurants and bartenders regarding tequila as a beverage choice, but that skepticism has dissipated. Moreover, availability is no longer confined to major metro cities; we’re witnessing substantial demand from Guwahati to Tawang, Hyderabad to Mangalore, Jaipur to Lucknow, and Ladakh to Hubli.”
Indeed, India predominantly embraces whiskey as its beverage of choice, with consumers favoring potent drinks for a swift buzz, thus solidifying the brown spirit’s reign, except in the southern regions where brandy holds sway. White spirits, constituting roughly 10% of the liquor market, typically find their place in cocktail culture.
Although the sales trajectory of tequila mirrors the surge in gin demand observed post-pandemic, the Mexican liquor market remains predominantly dominated by international brands, unlike the juniper-infused spirit. However, the emergence of locally crafted gins has altered the landscape within the category, shifting its focal point.
“Tequila is showing a promising trajectory compared to certain European markets,” noted Rajat Gera, Commercial Director at Six Senses Hotels in Rajasthan. “Indeed, both gin and tequila are establishing themselves, though the latter is currently more of a trend in India. While consumers may enjoy them on occasion, whiskey remains the go-to choice for unwinding.”
Continue Exploring: Diageo raises the bar in India with the introduction of world’s finest tequila, Don Julio 1942