In recent years, tequila has witnessed a remarkable surge in popularity, setting the stage to potentially dethrone vodka as the leading spirit in the United States. This upward trajectory is not just a passing trend but a sustained period of growth driven by several key factors.
Well in the mix of this spirited revolution is Teremana Tequila, a brand that encapsulates the dynamic elements fueling this expansion.
Teremana’s rise in the tequila market is emblematic of broader trends within the industry, namely lower price points (bottles start as low as $21) and celebrity ownership. Founded by Dwayne “The Rock” Johnson, Jenna Fagnan, Ken Austin and Dany Garcia, Teremana is produced in the highland mountains of Jalisco, Mexico. Its product line includes three expressions: blanco, reposado and añejo—each crafted from mature agave roasted in traditional brick ovens and distilled in handmade copper pot stills.
Appointed in late 2022, Teremana CEO Richard Black is playing a pivotal role in steering the brand towards global recognition. Born and raised in Cape Town, South Africa, he began his career as a brand manager at a leading wine and spirits company. His professional journey has taken him across various global markets, honing his skills at Gruppo Campari and later spearheading the revitalization of Westward Single Malt Whiskey. His strategic acumen and leadership have been instrumental in positioning Teremana as a formidable player in the tequila industry.
Now based in New York, Black recently shared with Forbes about Teremana’s mission to make tequila more accessible and appreciated worldwide.
We believe that the key factors driving tequila’s growth include a growing appetite for tequilas available across a range of price points, more discerning drinkers who really care about provenance and how something is made, and the continued significance of celebrity culture. Consumers understand that tequila is an incredible spirit, due to its versatility in cocktails and its distinct flavor profile, which also makes it enjoyable to savor neat.
In terms of trends, these are evolving as consumers become increasingly more knowledgeable about tequila and agave spirits overall. We’ve observed a growing preference for our aged expressions, such as reposado and añejo. This indicates a shift towards appreciating tequila as a sipping spirit. This trend is creating new opportunities for enjoying tequila across a variety of different occasions—more so than there were before.
We are proud of the incredible growth that Teremana has achieved in North America since launch. Our success is attributed to our founder, Dwayne Johnson’s vision for creating a high-quality but accessible tequila for all, that is crafted with mana, and the genuine connection that he shares with his audience. The consistent high-quality of Teremana continues to drive strong sales, with our commitment to mana serving as the guiding principle behind every aspect of our operations. Through our small-batch process of roasting 100% mature blue weber agave in small traditional brick ovens and distilling in handmade copper pot stills, we’ve achieved a multi-award-winning taste that stands on its own. There is now an overwhelming appreciation for such a handcrafted ultra premium tequila at an accessible price.
Like many spirits brands these days, Teremana is perhaps best known for its celebrity ownership. How has this business aspect contributed to its rapid growth and market acceptance?
Celebrity culture holds significant influence worldwide, particularly in the United States. People have a keen interest in the lives of celebrities and the brands they use. This curiosity extends to the spirits industry, where consumers often face a daunting task of choosing from a wide range of tequila brands. Consequently, consumers often rely on the recommendations of trusted individuals, including celebrities. In the case of Dwayne, people place their trust in him because of his authenticity and dedication to hard work. His values resonate naturally with his audience and lead to an innate trust in the quality of Teremana.
In any industry, the celebrity endorsement of a product will help drive awareness and first time trial, but the product quality is what drives consumer loyalty. Dwayne’s commitment to quality shines through with Teremana, where the primary focus was on crafting a top-notch, but accessible tequila. To achieve this, he meticulously sampled 113 different distillations until he found the precise specifications for the exceptional liquid that embodies Teremana.
Dwayne’s intention was clear: he wanted the tequila to speak for itself. When you taste Teremana, its remarkable flavor profile and mouthfeel becomes the compelling reason why consumers keep returning for more.
As a Campari Group veteran, you have a track record of successfully expanding brands into new markets. What strategies are you implementing to bring Teremana to more parts of the world, and what challenges do you anticipate in this global expansion?
The expansion of Teremana comes as a natural next step following our launch in the U.S. in 2020, when we quickly became the fastest premium spirit brand to reach one million 9-liter cases of sales in a rolling 12 months. The brand has since expanded to Canada and Mexico, where the tequila category is also very developed. We feel that 2024 is the perfect time to expand, given that we are on the cusp of a global tequila boom.
In 2022, the IWSR identified agave-based spirits as the fastest-growing major spirits category globally, with North America (U.S., Canada and Mexico) now representing approximately 93% of super-premium and above tequila sales worldwide. This indicates significant potential for category growth through further consumer education. Tequila remains an underdeveloped category outside of North America, and Teremana aims to play a pivotal role in introducing high-quality tequila to new drinkers, which has started in our selected expansion markets where interest in tequila is growing: the United Kingdom, Australia, Germany, the United Arab Emirates, Colombia and global travel retail.
To land on these five targets, we weighed our market opportunities across a diverse set of factors, such as spirits and tequila category potential, consumer trends, cultural relevance of the category and various other relevant factors. Our thinking is that we have an incredible brand with a visionary founder, who has the unique ability to transcend the category. We also see ourselves as catalysts for market growth, poised to play a pivotal role in driving global expansion within the tequila category.
In each new country, the route to market varies significantly, with the on-trade and off-trade sectors playing different roles in consumer behavior. We’ve adopted a very tailored approach for each market, carefully considering the nuanced channel dynamics and the diverse behaviors of its consumers. In each new market, we will be implementing a multi-channel marketing program. The support extends to both on and off-trade channels, featuring awareness-driving activity and consumer-targeted experiential events, introducing Teremana’s delicious taste to more consumers for the first time. These efforts aim to shine a spotlight on the brand’s unique ethos of mana, which is a consistent driving force.
Over the course of your tenure in the spirits industry, how have you observed consumer preferences evolve, particularly in the tequila category? How is Teremana positioning itself to meet these changing preferences?
We’ve observed a growing preference for our aged expressions. This trend is creating new opportunities for enjoying tequila across a variety of different occasions. In tandem with this, qualitatively, we have seen cognac drinkers embrace the tequila category, this observation comes as a result of an IWSR drinks market analysis, which documented cognac’s drop in volumes over recent years. Other outlets reported that cognac drinkers are two times more likely to drink tequila than alcohol drinkers in general, and in the past six months, more than one-fifth of cognac drinkers said they consumed tequila on their last drinking occasion.
With the continued rise in awareness of agave spirits, we anticipate this trade to occur across other brown spirit categories, too. For Teremana, our philosophy of crafting a high quality tequila, made with the spirit of Mana, extends to our entire range. Our reposado, which is aged for a minimum of two months in small American Oak barrels that previously held bourbon, sits at a fantastic price point and allows our consumers to really explore this category. In addition, through our inherent values of mana—which stands for bringing good energy, bringing people together and doing things the right way—Teremana stands out by authentically reflecting consumers’ down-to-earth values, rather than signaling status and bling.
Looking ahead, what are your predictions for the tequila industry over the next five to ten years? How do you see Teremana continuing to lead and innovate within this space?
Tequila is expected to experience significant growth worldwide over the next 5-10 years. A 2022 Tequila Category Assessment report published by IWSR Drinks Market Analysis found that tequila is poised to overtake vodka in terms of dollar value by the end of 2024.
In addition, the global market for tequila is expected to grow at a compound annual growth rate (CAGR) of 7% between 2021 and 2026, which is significantly higher than the overall global spirits volume growth rate of 2% during the same period. The report found that tequila’s top three markets—the U.S., Mexico and Canada—accounted for more than 88% of global volumes in 2021. This indicates that a significant export opportunity exists for the category in markets outside North America.” In countries like the U.K., Colombia, Australia, Japan and Spain, growth will be driven by positive consumer trends, including celebrity involvement, consumer migration to 100% agave products, rising cocktail consumption and growing interest in Mexican food and drink.
Our goal is to build Teremana into a true international tequila brand; we want to play a role in developing the tequila category by bringing the brand to more retail locations, bars and restaurants around the world.
As mentioned earlier, tequila is not yet a developed category outside of the U.S., and Teremana wants to be a part of bringing high-quality tequila to the rest of the world. Teremana will continue to reach and educate new consumers through the strategies previously outlined for each new market with a tailored approach.
