What can tequila & mezcal brands learn from St Patrick's Day to capitalise on the agave boom?
The modern consumer loves a celebration, and will seize any opportunity to do so especially in a post-pandemic environment. Cultural and national holidays have never offered a greater opportunity for food and drink brands, as ‘creating an occasion’ continues to drive the drinking experience. The question now lies in which markets and products will experience the biggest growth next.
As tequila and mezcal continues to gain unprecedented popularity in the market, Cinco de Mayo is set to be the next big holiday to evolve into a global drinking celebration. For brands, the stage is set for big opportunities, and to follow in the footsteps of St. Patrick’s Day and its synonymous beverage - Guinness.
With sales in tequila/mezcal in the US rising by 17.2% between 2021 and 2022, totalling $6bn (CBS, 2023) - and set to rise further, reaching $11 billion by 2028 (Statistica, 2023) - the takeover of this category shows no signs of slowing down. With key drivers like premiumization, social media influence, and a growing affinity for tequila cocktails, tequila is already expanding its cultural reach beyond just a spirit choice.
As brands seek to find new ways to capture and harness drinking occasions, this article looks at how tequila brands can leverage national and cultural celebrations to capitalise on the agave boom, and the brand opportunities for new and growing celebrations
Why is tequila booming?
The demand and market growth for tequila is clear. It is now American Gen Zers’ favourite base for RTD cocktails, appealing to 60% of this age group (IWSR, 2024), and unanimously ranked across regions as the number one premiumizing category globally (Bacardi Drinks Report 2024). But why has this spirit suddenly sky-rocketed in popularity and market share?
Premiumization plays a large role, as the complexity and versatility of the spirit positions it as a premium option in the cocktail scene, rivalling vodka as a leading spirit in the US. Consumers are willing to spend more but want more in return – and so are seeking out more premium drinks and beverages. As part of this, when choosing a drink, they are increasingly interested in the provenance and craftsmanship of what they are consuming. High-quality tequila boasts a rich history and unique flavor profile which fulfils this desire and brings intrigue and excitement to a cocktail menu.
Tequila also has a profile as a celebratory drink, and post-COVID, the overall occasion around drinking has seen increased value. People are eager to create, indulge and socialise in celebratory experiences, and tequila’s associated drinking behaviours deliver these memorable moments.
Further fuelled by social media influence and high-profile celebrities like Dwayne Johnson, George Clooney, and Kendall Jenner launching their own tequila brands, it becomes clear why this once niche spirit is now a mainstream favourite.
Ireland’s Global National Holiday
The market growth is there for tequila, now brands must take the occasion and seize its opportunity in response. So what can be learned from the Irish celebration?
St. Patrick’s Day may have its origins rooted in a country with population of just 5 million people, but it has evolved into a global phenomenon. Every March 17th, in over 200 countries, millions of people all over the world go out and celebrate Ireland’s national holiday. They don green attire, join in parades and arguably most importantly to many, drink one specific and iconic Irish drink.
On St. Patrick's Day, over 13 million pints of Guinness are consumed globally, compared to just 5.5 million on a typical day (WalletHub, 2022). Diageo-owned Guinness has become an integral part of the celebration and has become synonymous with the day - the drink and the occasion go hand-in-hand in consumer perceptions.
Whether it is the popularity of Guinness that has been a driver in St. Patrick's Day’s international recognition, or vice versa and the holiday catapulting drink sales, it is unquestionable they are linked, and support increasing awareness and consumption of Guinness. St Patrick’s Day is one of the most profitable days of the year for the brand, Diageo succeeding in owning the celebration.
Why Cinco de Mayo?
With its profile also tied to the country of origin, tequila is a prime spirit to mirror Guinness and globally expand a cultural holiday. And the similarities lie even more deeply rooted.
The global spread of St Patrick’s Day originated in 20th century migration, as Irish communities generated cultural influence through their heritage celebrations, and today this legacy remains, as still 9% of all Americans claim Irish heritage (US Census Bureau, 2023). In more recent decades, the US cultural expansion is stemming from Mexico - in 2022, 19% of the US population have Latino heritage - vs 7% in 1980 (Vintage, 2022) – as we see further expansion of celebrating heritage and these celebrations becoming worldwide.
Cinco de Mayo may not be the national holiday of Mexico, but has adopted a similar matching significance to Mexican-Americans as St Patrick’s Day has to Irish-Americans, and hence its impact has broadened. Already widely celebrated in the US, now its impact is moving across the Atlantic to wider celebration and significance.
Both holidays lie more deeply rooted that just a drink choice, but way for many to connect with their heritage. With a stronger consumer emotional connection, holiday campaigns can elicit a more impactful response. Cinco de Mayo has a greater percentage of consumer demographic in the US – and beyond, which offers greater potential opportunity.
The brand opportunity
Tequila is already synonymous with Cinco de Mayo, and the celebration is growing - - 59% of those celebrating Cinco de Mayo said they planned to purchase alcohol for the day, vs 53% for New Years Eve and 44% for St Patricks Day (Numerator, 2024). For brands to capture this opportunity, their focus should be not in initiating purchase, but on growing brand awareness and association, and creating innovative ways to ensure conversion and top market share.
St Patrick’s Day showcases how drink brands have excelled at this already – through limited edition drinks, merchandise, and marketing campaigns aimed at enhancing and extending the drinking experience.
Diageo has capitalized with Guinness POS merchandise at on-trade venues, and partnerships at sporting events around the occasion like the Six Nations. Venues such as Slug & Lettuce offer St. Patrick’s Day-themed cocktails such as their Mint Choc Chip Shake Shot, whilst Be at One offer ‘Shamrook Shooter’ flights, to drive consumer engagement and brand memorability. Tequila brands can match this through making their bars a destination with themed POS and menu options, to entice consumers to mark the occasion.
In the off-trade, upgrading the experience and strengthening brand identity can equally capture consumers choosing to drink at home, as well as influence those who may not have been planning to celebrate, to mark occasion in a smaller way.
Tequila brands should focus on elevating the at-home cocktail experience, mirroring how Guinness introduced the Nitro Serve for the perfect at-home pour. Cocktail kits with specific Cinco de Mayo recipes or flavours, POS that will deliver the perfect cocktail serve, or campaigns that encourage actions to celebrate the occasion (a Cinco de Mayo dinner party or prompts for themed drinking activities) all create an increased and elevated drinking experience.
Conclusion
The tequila boom is not a passing trend, and as Cinco de Mayo continues to grow in popularity outside of the US, there is potential for it to achieve the global impact of St. Patrick's Day. With effective branding, marketing, and cultural resonance, Cinco de Mayo could solidify its place as a key drinking occasion. The tequila train is moving fast, and brands that get on board with celebrating the 5th of May early are the ones who will prove integral to its growth – and hence the ones who will reap its lasting rewards.