Tequila captures more attention in the current consumer landscape than virtually any other spirits category. From high-end offerings on-premise to operating as a key base in ready-to-drink formats at home, the tequila category has found its way into nearly every occasion. But as hard as it might be to imagine in 2024, this wasn’t always the case. 

According to DISCUS, tequila has increased U.S. volumes by 294% at an average rate of 7.1% per year since 2003. As recently as 2019, the category sold 20.1 million 9-liter cases and has since catapulted to 31.6 million cases in 2023. 

A Supplier’s Perspective on the Rise of Tequila

The Park Street Insider Podcast has played host to some of the brands that have played a key role in tequila’s ascent in the United States. Their stories help uncover key reasons why tequila has blossomed into the second-largest category by value over the last decade. 

Tequila Goes Premium and Category Awareness Spreads 

In 2002 Guillermo Erickson Sauza turned decades of family distilling history into a first distillation for what would go on to become a beloved brand: Tequila Fortaleza. Officially founded in 2005, the brand first imported to the U.S. in 2007 and has become one of the key proponents of the category’s growth.

When Fortaleza first came to the U.S. in 2007, case volumes for the tequila market were only about 10.5 million strong, and consumer acceptance of the spirit was a far cry from what it is today. “I would say 15 years ago we got a lot of comments like ‘I don’t drink tequila. I had a bad night with Jose Cuervo in college and that’s turned me off.’ And it used to be that I would hear that ten times or fifteen times in an event,” said Billy Erickson, Guillermo’s son who leads U.S. sales and marketing efforts for the brand. 

In the early days, Fortaleza spent countless hours on the education front pitching bartenders and winning over accounts in the on-premise. This coincided with the growth of the craft cocktail scene, as bartenders became interested in finding drink applications for tequila. 

But Fortaleza took education a step further, by hosting scores of bartenders and industry members at their distillery home in Jalisco. “So inviting on-premise accounts, and off-premise accounts down and having that as a component of our strategy has worked out really well for us,” said Erickson. Immersing the industry in the native culture of the spirit abroad went a long way to help Fortaleza gain traction domestically. 

Erickson further explains that over time, a combination of efforts from key brands, cocktails, and cultural evolution shifted perceptions and generated a lot of interest in tequila as a premium spirit. 

“I think the viewpoint on tequila has totally changed over the course of the past 15 years. Initially, it started with Patron, and then Casamigos and other celebrity-back brands. But I think there’s been a number of small brands out there who have been trying to push the brand in that direction as well,” noted Erickson. 

The spirit’s rise is partially owed to the fact that it already had strong roots in the U.S. “There’s a lot to be said about the growing influence of Hispanic culture in the United States. And let’s be honest, the margarita was the number-one drink for a long time before the current tequila trend, right? So tequila had a good base, it was almost a shift just in the category: an enhancement, an improvement of what was already there,” Erickson continued. 

Its new status as a premium spirit was a key ingredient to tequila’s rise, according to Erickson. “I think that tequila, like everything else, benefited from the premiumization that’s been driving the business for the past 10 years, but it’s probably benefited the most out of any of the categories,” he said. 

Tequila’s flexibility to accommodate different budgets and occasions has contributed to its growth. Initially coming to market with a number of affordable value brands in the early 2000s, its expansion into high-end and super-premium SKUs made tequila accessible to all U.S. drinkers. 

Embracing A Wider Audience 

In 2019, when the popularity of agave was already ramping up, the founders of 21 Seeds Tequila identified an untapped market opportunity for a premium, female-centric flavored tequila. Capitalizing on flavor innovation, a health-conscious ethos, and aspirational messaging, the brand quickly resonated with its target consumers. Just three years after its launch, 21 Seeds was acquired by Diageo in 2022.

Kat Hantas, co-founder of 21 Seeds, noticed the shift toward a more health-conscious mindset among Millennials in the late 2010s. Witnessing this change within her own community, she observed how adults were re-evaluating their relationship with alcohol. “Many of my female friends were switching from wine and champagne to tequila,” Hantas noted, “while guys I knew, aiming to reduce carbs and sugar intake, were also transitioning to tequila as a better alternative to beer.”

While high-end sipping tequila had previously become the benchmark for innovation within the category, Hantas recognized that this wasn’t how her friends were engaging with the spirit. “They weren’t taking shots of it or sipping it, so it’s sort of like, well, what are they doing with it? Well, they’re drinking it” in spritzes, simple cocktails, or on the rocks.  

Hantas saw an opportunity to capitalize on shifts in consumer preference toward drinking tequilas and decided to innovate on a flavor basis. “I was getting a lot of requests for my infused tequila. And then I noticed this switch with the new way people were drinking tequila, and it was literally that: a drinking tequila,” said Hantas. 

There was also a clear white space in terms of how tequilas were being marketed when Hantas started to explore the wider market. “When we went into the tequila aisle at the time, what we found was that there were a lot of premium, super-premium, and ultra-premium tequilas. And they were all being marketed like scotches and whiskeys for the male consumer to be sipped. And there was nobody speaking to that female consumer or that guy moving away from beer to get that same sort of relax and unwind spritz occasion. So we thought, wow, there’s a space here for us.” 

Richard Betts, founder of Tequila Komos, noticed the same thing when he and his business partner, Joe Marchese, were getting ready to launch their brand in 2017. 

Once they made the decision to start Tequila Komos, “that discussion very quickly transitioned to when you look at the way great tequila is made and marketed, is in fact done so in a fashion that is very different from the actual occasion when people consume the tequila. And so we thought, how do we more closely align these two things, the production and marketing, with the occasion? And, of course, that’s the whole story of Komos,” noted Betts. 

Tequila Komos came to market at a time when luxury tequilas were becoming a hot property. By marketing it to celebratory occasions, Komos was able to gain traction with consumers almost instantly, becoming the fastest-growing super premium tequila two years after launching. The brand eventually partnered with E&J Gallo to expand its distribution footprint in the U.S. 

More Resources on Tequila

A Look at the U.S. Tequila Market

Top 10 U.S. States for Sales of Tequila 

The Beverage Alcohol Categories to Look Out For


Start Enhancing Your Productivity Today

Over 3,000 Alcoholic Beverage brands have experienced the benefits of partnering with us to enhance their productivity. Contact us and find out how Park Street can start helping your brand today.