The U.S. is living in a Tequila Revolutionby@ikuchma

The U.S. is living in a Tequila Revolution

by IgorFebruary 24th, 2022
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According to the latest data from the Distilled Spirits Council of the United States, in 2021 sales of tequila and mescal in the world's first economy increased by 30.1% (YoY) - to $5.2 billion. The leader, however, is still "live water": in the past 12 months, vodka products were sold for $7.3 billion.

How long will the hegemony of "whitewater" last? According to some estimates, in a few years, the Mexican beverage may come out on top. In particular, the largest producer of strong alcohol in the world Diageo plc (DEO), whose portfolio includes such brands as Smirnoff, Johnnie Walker, Guinness, Baileys, Captain Morgan, and others, predicts that the growth rate of tequila sales continue to gain momentum. It notes that in the first half of the fiscal year 2022, which ended Dec. 31, revenues from sales of "blue agave juice products" jumped 56% year over year.

Why is America’s focus shifting toward tequila? First, of a population of 331.4 million people, about 19% are Hispanics. To be more precise, that number reached 62.1 million in 2020, an increase of 23% over the previous decade.

Second, Hollywood's top names are helping to popularize tequila - in 2017, actor George Clooney sold the rights to produce Casamigos-branded tequila to Britain's Diageo for $1 billion. Last year, Constellation Brands invested to set up the production of Dos Hombres mescal by "Breaking Bad" actors Aaron Paul and Bryan Cranston. Actor Dwayne Johnson and model Kendall Janer also launched their own tequila brands.

What's next? On the one hand, the fact that alcohol consumption is up about 14% since the pandemic began gives the alcohol industry a pretty good outlook, especially for Diageo (DEO), Constellation Brands (STZ), Brown-Forman (NYSE: BF.B, BF.A), Anheuser-Busch InBev (BUD), etc.

On the other hand, diseases associated with excessive alcohol consumption may also grow. As far as pharmaceutical companies are concerned, there is no shortage of drugs for addiction from Pfizer Inc. (PFE), Amphastar Pharmaceuticals Inc. (AMPH), Opiant Pharmaceuticals Inc. (OPNT), and Alkermes (ALKS), the other question is whether they can be used to treat alcoholism.