The Tequila Template: How Regional Spirits Are Following Tequila's Premiumization and Internationalization Playbook

Tequila's remarkable growth and premiumization journey over the past decade.

Other regional spirits categories are attempting to replicate tequila's playbook, with Japanese whisky, mezcal, and now baijiu following similar premiumization and internationalization strategies.

Let's be honest - tequila's transformation from spring break shot to luxury sipping spirit is nothing short of remarkable. Tequila has completely rewritten the rules of what a regional spirit can achieve on the global stage. And now, everyone wants a piece of that playbook.

The numbers tell a compelling story:

• Between 2019 and 2023, tequila volumes in the U.S. soared from roughly 20 million 9-liter cases to over 30 million cases

• In 2023, tequila overtook whiskey as the most valuable spirits subcategory in the U.S.

• Super-premium-plus agave spirits volumes are poised to grow roughly twice as fast as whisky between 2022 and 2027 (2022)

But what's truly fascinating isn't just tequila's meteoric rise - it's how other regional spirits are now following the exact same template. Japanese whisky, mezcal, and even baijiu (China's national spirit) are adopting tequila's strategies with remarkable similarity. This isn't coincidence; it's calculated imitation of a winning formula.

The Premiumization Masterclass

Tequila's journey from commodity to luxury item didn't happen by accident. It was a deliberate strategy executed with precision over the past decade.

The playbook started with a clear price hierarchy. As IWSR notes:

"Both agave spirits – tequila especially – and whisky of all origins have successfully created a clear and easily comprehensible product pricing hierarchy based on a number of compelling reasons to buy, such as age, origin and flavour."

This pricing ladder - from accessible entry points to ultra-premium expressions - created a natural progression for consumers to trade up. And trade up they did. The ultra-premium and luxury tequila segments have exploded, with bottles regularly commanding $200+ price tags.

I'd argue this wasn't just smart marketing - it was a fundamental reframing of how consumers perceive regional spirits. Tequila didn't just get more expensive; it created an entirely new luxury category where none existed before.

Now look at what's happening with Japanese whisky. Following tequila's template almost to the letter, Japanese distillers have established clear premium tiers, limited releases, and age statements that justify escalating price points. The result? Japanese whisky has become one of the most sought-after spirit categories globally, with bottles from distilleries like Yamazaki and Hakushu commanding prices that would have been unthinkable a decade ago.

Mezcal is following the same path, just a few years behind. "Mezcal is surging, with double-digit growth as more consumers discover its depth and complexity," says Abe Lichy, co-founder and CEO of Mezcalum.

Baijiu is adopting this template as well, with an 84% value share of the global luxury spirits segment (particularly in Asia) – covering products with a weighted average price above US$100, according to IWSR.

The pattern is unmistakable: establish clear quality tiers, create compelling narratives around production methods and terroir, and gradually shift consumer perception from "traditional local spirit" to "global luxury product."

The Celebrity Endorsement Engine

Let's talk about the elephant in the room - celebrity involvement. Tequila's rise coincided with (and was accelerated by) a wave of celebrity-backed brands. From George Clooney's Casamigos to Dwayne Johnson's Teremana, star power helped tequila reach new audiences and provided a shortcut to premium positioning.

This wasn't just about famous faces on bottles. The most successful celebrity tequila brands understood that authenticity matters. They told stories about production methods, highlighted traditional techniques, and positioned themselves as genuine participants in tequila culture rather than mere endorsers.

The 2020-2023 period saw an explosion of celebrity-backed tequila labels. While star power helped popularize tequila and reassure curious buyers, 2024 data suggest celebrity names alone won't guarantee success. The brands that have thrived are those that balanced star power with substance.

Now we're seeing the same playbook deployed across other regional spirits:

• Japanese whisky has attracted celebrity investors and endorsers

• Baijiu is beginning to court international celebrities to help bridge cultural gaps

• Mezcal has seen figures like Bryan Cranston and Aaron Paul (of Breaking Bad fame) launch their Dos Hombres brand

The template is clear: use celebrity involvement to create awareness and credibility, but back it with authentic product quality and storytelling.

The Cocktail Culture Gateway

Tequila's rise wasn't just about sipping spirits - cocktails played a crucial role as gateway experiences. The margarita has consistently ranked as America's favorite cocktail, creating an accessible entry point for consumers to discover tequila.

From there, the category expanded into premium cocktails, with tequila versions of classics like Old Fashioneds and Negronis appearing on high-end bar menus. This cocktail strategy served two purposes: it introduced tequila to new consumers in familiar formats, and it elevated the spirit's perception from party shot to sophisticated ingredient.

Japanese whisky has followed this template with the highball - a simple, approachable cocktail that showcases the spirit's qualities without intimidating newcomers. As one industry expert notes:

Mezcal is leveraging its distinctive smoky profile to create signature cocktails that highlight its unique characteristics:

"Tequila and mezcal aren't just for Margaritas anymore.... Bartenders are using them in bold, creative cocktails, making them menu staples from dive bars to Michelin-starred restaurants." - Abe Lichy

Baijiu, whose flavor profile has historically challenged Western palates, is being reimagined in cocktail formats to make it more accessible to international consumers.

The cocktail strategy isn't just about sales - it's about changing perception. When consumers experience these spirits in well-crafted cocktails at respected establishments, it elevates the entire category.

The Authenticity and Heritage Narrative

Perhaps the most powerful element of tequila's template has been its emphasis on authenticity, heritage, and production methods. Terms like "additive-free," "traditional tahona process," and "highland agave" have become part of the premium tequila lexicon.

This focus on production details accomplished something remarkable: it transformed what could be seen as limitations (strict production requirements, geographical restrictions) into premium selling points. The fact that true tequila can only be produced in specific Mexican regions became a feature, not a bug.

Japanese whisky has embraced this template enthusiastically, highlighting distinctive Japanese production methods, unique water sources, and the influence of Japan's climate on maturation. The Japanese whisky industry even implemented new labeling regulations in 2021 to protect authenticity - a move straight from tequila's playbook.

Mezcal has doubled down on production storytelling, emphasizing traditional methods like pit roasting agave and horse-drawn tahona wheels. The spirit's artisanal, small-batch nature has become central to its premium positioning.

Baijiu producers are now highlighting their centuries-old fermentation techniques and unique production methods as they attempt to gain international recognition and capitalize on the trend of premiumization.

The authenticity template works because it creates barriers to entry and points of differentiation in increasingly crowded categories. When consumers understand why a spirit is special, they're more willing to pay premium prices.

The Tariff Challenge: Navigating New Trade Realities

I'd be remiss not to acknowledge that the global spirits landscape now faces significant headwinds in the form of tariffs, primarily emanating from, but not limited to, the United States.

These trade barriers arrive at a critical juncture in the evolution of regional spirits. Tequila, as the pioneer, now faces potential import reductions of approximately $810 million annually. With 99% of tequila sourced exclusively from Mexico, the category stands to be disproportionately affected by these trade barriers, just as it had achieved its crowning moment of overtaking whiskey as the most valuable spirits subcategory in the U.S.

The tariff landscape extends far beyond North America. Japanese whisky, which has followed tequila's premiumization playbook with remarkable success, now faces its own tariff challenges from the U.S. These additional costs threaten to disrupt the carefully constructed price hierarchies that have defined Japanese whisky's global success. For Japanese producers who have invested heavily in premium positioning, these tariffs create difficult decisions about absorbing costs or passing them to consumers, potentially undermining their luxury status.

Baijiu faces even steeper challenges in its international expansion ambitions, just as leading brands were beginning to gain traction with Western consumers through premium positioning and cultural storytelling

Mezcal also finds itself in a particularly precarious position. Still in the early stages of its international expansion and premium positioning, mezcal lacks the established market presence that might help tequila weather these challenges.

The industry's response has been multifaceted. Many businesses have engaged in strategic stockpiling, accelerating imports ahead of tariff implementation. Meanwhile, expansion plans across multiple spirit categories have been frozen as companies assess long-term implications. The critical question becomes: who absorbs these increased costs? Larger producers with stronger margins may temporarily shoulder the burden to maintain market share, while smaller craft producers with tighter margins face difficult decisions about passing costs to consumers.

Perhaps most concerning is how tariffs might influence the carefully constructed premium positioning that regional spirits have established. These categories have spent years establishing clear price hierarchies and quality tiers that justify premium pricing. Tariff-induced price increases risk disconnecting these carefully calibrated price points from consumer value perceptions. When a $45 bottle suddenly costs $55 due to tariffs rather than production improvements or aging, the premiumization narrative that has served these categories so well becomes harder to maintain.

This situation creates a fascinating case study in resilience for the global spirits industry. Will the brand equity and consumer loyalty built by these regional spirits withstand these pricing pressures? Or will we see consumers trade down within categories or explore alternatives? The coming months will reveal whether the tequila template has created sufficient brand strength for these spirits to weather trade headwinds or if they'll need to recalibrate their growth strategies in response to this new economic reality.

The Generational Appeal Shift

One of tequila's most impressive achievements has been its ability to appeal across generations while particularly resonating with younger consumers. This wasn't just luck - it was strategic positioning that balanced respect for tradition with contemporary relevance.

Tequila brands successfully targeted millennials and Gen Z by emphasizing attributes that matter to these demographics: authenticity, sustainability, craft production, and Instagram-worthy aesthetics. They created products that could be both respected by connoisseurs and embraced by trend-conscious young consumers.

• Japanese whisky is following this template by balancing reverence for tradition with modern branding and experiences.

• Mezcal has particularly excelled at appealing to younger demographics yearning for more authentic, high-quality agave spirits.

• Baijiu, traditionally associated with older Chinese consumers, is adapting its approach to appeal to younger drinkers via the aforementioned lean into cocktail culture.

The generational template is about creating products that feel both timeless and contemporary - respecting tradition while embracing modern sensibilities.

The Future Implications

The tequila template's influence extends beyond the spirits we've discussed. We're already seeing rum, cognac, and even some vodka brands attempting to apply elements of this playbook. But will it work for everyone?

I believe we're witnessing the early stages of a fundamental restructuring of the global spirits industry. Regional spirits that were once confined to their places of origin are becoming global luxury goods, following tequila's lead. This has major implications:

1. Category blurring will accelerate

2. Authenticity will become even more crucial

3. The pace of premiumization will vary by market

4. Consolidation will follow innovation

The tequila template isn't just changing how specific spirits are marketed - it's redefining how consumers think about the entire spirits category. The old paradigm of clear distinctions between vodka, whiskey, rum, and other spirits is giving way to a more nuanced understanding based on production methods, origins, and price tiers.

The brands that can authentically tell their stories while creating accessible entry points for new consumers will be the ones that thrive.

The obvious trend of tequila's growth masks a hidden pattern that may ultimately prove more significant: regional spirits from around the world are following a remarkably similar path to global prominence. The tequila template isn't just a marketing strategy - it's becoming the dominant model for how regional spirits transform into global luxury goods.

Could the narrative change? Always. The industry has seen reinvention before, and it will again.

But right now, we’re not looking at a blip. We’re watching a realignment. When the same consumer instincts show up across categories and countries - from mezcal to baijiu to bourbon - it stops being a trend and starts becoming the new normal.