Tequila takes centre stage: Why Indians are raising their glasses to the agave spirit

Move over gin; there is a new kid on the block, and it is creating waves at bars all over India. We are, of course, talking about tequila. Consider this: Last year, about 123,000 cases of tequila were sold in the country, up from around 68,000 cases in 2022. This is a significant increase from the pre-pandemic times in 2019, when 38,950 cases were sold. Considering these trends and prevailing consumer preferences, the market for tequila in India is expected to grow at a compound annual rate of 12.69% from 2024 to 2032, according to the India Tequila Market Report 2023. It projects the value of tequila consumption to surpass Rs 2,000 crore by 2028. This surge will be fuelled by global drinking trends and the rising popularity of premium and craft tequila brands, the report says.

A recent report by International Wine and Spirits Research (IWSR) also highlights that tequila is becoming a preferred choice among the urban youth and middle-aged consumers in metropolitan areas, driven by a burgeoning cocktail culture and the perception of tequila as a sophisticated and health-conscious option.

While the global beverage alcohol market struggled—it was up 1% by volumes in 2023, India enjoyed a 5% growth. During the year, spirits sales in India grew 12%, beer demand was up 38%, wine sales increased 19%, and RTDs (ready to drink) experienced a 40% growth, according to the IWSR report. But it was the strong growth of white spirits that stood out, with vodka and gin sales advancing by double digits and agave-based spirits (all spirits made of the agave plant; tequila is specific to Mexico like champagne is to France) surging by 80%, the report says.

“India’s tequila market is experiencing rapid growth due to a combination of factors. This includes a rising demand for premium spirits, the expanding cocktail culture in urban areas, and a desire to experiment with new spirits among new-age consumers who are entering the market,” says Adtnu Tiwari, Category Lead-Premium White Spirits at Bacardi India. The company currently offers two variants of tequila in the Indian market—Patrón Silver and Patrón Reposado. It has increased its presence from two cities in 2023 to 15 cities across India today. “We’re also introducing an exciting new offering in the ultra-premium segment in India in Q3 of [calendar year] 2024,” says Tiwari.

Competitor Diageo launched its ultra-premium tequila brand Don Julio 1942 in India in April this year. Karina Sanchez, Don Julio Global Brand Ambassador, says that India is an extremely important market for the brand. According to her, the popularity of tequila is due to the spirit’s versatility. “You can have tequila, not just in a classic Margarita or Paloma, but you can also have it in an Espresso Martini (typically made with vodka) or an Old Fashioned (typically a whisky cocktail),” says Sanchez, adding, “The other thing is that Mexican culture is trending across the globe, including India.”

Since tequila or rather the larger parent category—agave—is plant-based, it is considered healthier with a lower calorie count, adding to the spirit’s popularity. Vikram Achanta, Founder and CEO of alco-bev training company Tulleeho, recently set up the country’s first agave club, which brings together like-minded people to share their passion for agave. “Consumers today are increasingly curious and are looking beyond just purchasing a spirit—they’re seeking out experiences, direct interactions, and conversations that bridge the gap between them and the brand,” he says.

Tequila also has a youthful, fun vibe, as it is considered a celebratory drink in Mexico. “As a sipping drink or with a mixer, agave spirits are definitely seen as more ‘sessionable’ compared to sipping spirits like single malt and cognac. Bartenders are also constantly on the lookout for new and flavourful spirits to add to their repertoire, and agave has become extremely popular in this regard,” says Achanta.

Agrees chef-entrepreneur Tarun Sibal, who set up an agave-focussed bar at Barfly in Goa last year with 15 signature cocktails and an extensive agave list. “Our guests were asking for tequila/agave-based drinks and that was our biggest benchmark. When my consumer is asking for a Mezcal Negroni, we better be able to serve it,” he says adding that at his New Delhi-based bar, KhiKhi, one out of four cocktails sold are tequila-based.

Celebrities and Tequila

Globally, there is a trend of celebrities entering the tequila market. From George Clooney’s Casa Amigos to Michael Jordan’s Cincoro Tequila to Kendall Jenner’s 818, there are various celebrity associations, which also adds to tequila’s popularity among the youth. “This star-studded association that the category holds increases its allure among the general public as well, with many of those newly entering the legal drinking bracket (an expected 65 million consumers are to be of legal drinking age over the next five years), opting for tequila as their first choice of liquor,” explains Achanta.

Kendall Jenner’s 818 is being distributed in India exclusively by Berry Beverages, which also has the mandate for Clase Azul Tequila, a premium tequila with prices starting at `35,000 and going up to `5 lakh per bottle. Celebrities entering the tequila space, according to Sahir Berry, Founder of Berry Beverages, have helped elevate tequila to much higher standards than it was perceived before.

Back home, actor and film producer Rana Daggubati, along with musician/composer Anirudh Ravichander, has launched a tequila brand called Loca Loka in association with Hyderabad-based entrepreneur Harsha Vadlamudi (Managing Partner of microbrewery Ironhill India). They first launched the brand in the US, which is the world’s largest tequila market, with plans to introduce it to India by the middle of next year. “Classically, alcohol in India has been in the whisky and rum space, but over the past decade there has been an increase in crafted spirit. Tequila has become a lifestyle extension more than anything else,” says Daggubati.

So, is tequila the new gin for India? Rakshay Dhariwal, Founder and Managing Director of Maya Pistola Agavepura (Pistola), Asia’s first premium aged 100% agave spirit—that is made in India—believes that the agave revolution in the country is just taking off. “Within the next five to six years, the consumer demand for newer agave variants will increase, especially due to the celebrity quotient that benefits the category. The next wave of cocktail culture is also driven by agave. As the gin phase saw multiple enthusiast clubs and on-ground events drawing crowds, the same can be said for agave,” he says. Pistola, which was launched in 2022, is today available in the US, Thailand, and Singapore, besides India. Diageo’s subsidiary, United Spirits, acquired a 15% stake in Pistola in April this year.

Whether it’s a shot, a cocktail or a sipping drink, tequila and its cousins mezcal and agave are here to stay.

@smitabw