Tequila, mezcal North America boom set to continue

The recent solid growth seen in North America is forecast to rumble on, forecasts from GlobalData suggests. Saymah Mahmood reports.

North America’s thirst for Tequila and mezcal shows little sign of being sated, with the segment set for more solid growth, exclusive data suggests. 

Volume sales of Tequila and mezcal are set to jump by more than 31% between 2021 and 2026, forecasts published by research and intelligence group GlobalData show. 

The segment has enjoyed strong momentum in North America in recent years, helped by soaring demand for Tequila in the US. Tequila sales in the US in particular have been helped by the country’s proximity to Mexico, the number of Hispanic consumers in the market and the ability of distillers to ride the broader premiumisation trends seen across a number of spirits segments. 

There are some possible headwinds on the horizon, including high agave prices, supply shortages and the potential for consumers to shake up their spending as the pressure on household bills grows. 

However, GlobalData, Just Drinks’ parent, forecasts Tequila and mezcal sales in North America will grow by 31.2% in volume terms and by 38.6% by value between 2021 and 2026. 

The overall prospects for Tequila and mezcal look promising globally, the data suggests. Worldwide, sales are predicted to increase by 27.6% during the period, rising from 342m litres in 2021 to 424.7m litres in 2026. The overall value of the market is forecast to increase by almost 40%. 

Beyond North America, growth is set to continue to be robust in the next largest geographic regions of western Europe and Asia. The fastest rate of growth is forecast to be in the Middle East and north Africa, albeit off a small base. 

Increasing disposable incomes and the revival in tourism across the MENA region after the Covid-19 pandemic are likely driving healthier market forecasts. Total disposable income is set to almost double in the region by 2040. 

Both Egypt and the UAE are set to see the biggest growth in the region, with forecast increases in sales of 60% and 58% between 2021 and 2026, respectively. 

Recent legislative changes in countries like the UAE are also likely to be a factor in the promising market forecasts for the MENA region. 

In November 2020, the UAE relaxed laws so that consumers no longer required a government-issued license to purchase, transport or possess alcohol in their homes. The country also announced new laws removing punishments for the consumption, sales and possession of alcohol for those aged 21 and over. 

This was mainly done to build on the country's reputation as a hub for international tourism and business. 

In 2020, the most popular brands in the region were Beam Suntory’s Sauza and Becle’s Jose Cuervo, according to GlobalData. 

More recent Tequila market insight from Just Drinks: 
“Now is the right time” – Vivir Tequila’s Paul Hayes talks the UK brand’s push into the US 
The Mex Factor – why Tequila’s growth could blaze trail for others 
Could finite supply and high agave prices be about to burst Tequila’s celebrity-driven bubble? 

Image credit: Alena Plotnikova / Unsplash