Tequila breaks out in Germany

Tequila is finally breaking out of the much-maligned German shots ghetto, with consumers and bartenders alike. Andrew Wilkin looks into the liquor for MIXOLOGY ONLINE, finding out whats happening in the established market of the US, the emerging one of China and our domestic market of Germany.

All drinks have their unfortunate connotations in popular culture. Gin makes you cry. Whiskey is for the “oldies”. And tequila? The widespread association is one linked with shots, insobriety and hangovers of the most epic variety. It’s a “party” liquor — drink it fast, try not to taste it too much, and let the good times roll. Tomorrow? Don’t think about it.

As associations go, it’s undeserved. “Good tequila has great mixability and a wide range of taste”, says self-defined tequila aficionado Bettina Kupsa, previously of Hamburg’s Le Lion and soon to open up her own bar The Chug Club. Thankfully, things are changing. Fortune had a look into the liquor in this report, finding a spirit category in flux — with high-end tequila products fighting off these negative cliches, and experiencing unprecedented sales growth. So much so, that they’re looking at the Chinese market too. Clay Risen, a New York Times journalist, had a look at tequila’s global surge, and we’ve added some choice nuggets regarding the domestic German industry too. So, what’s the outlook for tequila in Germany?

Behind it all

Time for a quick lowdown on the liquor. The official date of the first distillation of tequila is difficult to exactly pin down. What we do know, however, is that it originated in the 16th century in Mexico, in the city of Tequila, 65km northwest of Guadalajara, and in the highlands of the state of Jalisco. One of North America’s first indigenous distilled spirits, tequila is produced through the distillation of blue „Weber“-agave, and by law, only tequila made in these regions can take on the name.

The drink was then first exported to the US in 1873, by Don Cenobio Sauza, the founder of Sauza tequila, although for a long time these exports were not purely agave-based. What was widely known as tequila for decades, is made with only at least 51% agave, with the rest consisting of sugars, cane sugars and glucose sugars, and other flavouring chemicals. These blends – the famous Cuervo Especial for example – is the stuff of hangovers past, the cheaper mix which dominated the US market until the 90’s, when the premium products entered the market. These new tequilas, such as Patrón, are made from 100% of blue Weber, utilising completely different methods of production. Both sippable and mixable — this a a liquor saddled with a very unfair reputation inflicted by the past.

The US surge

Fortune depict a US market which is on the certifiable up, and it’s the 100% agave mixes, not the blended mix of headache-legend, that’s leading the charge. Big name conglomerates, such as Diageo, are getting involved — for example, Diageo with Don Julio, or Beam Suntory with El Tesoro De Don Felipe. And even if overall sales currently lag behind the big guns — gin, whiskey, bourbon and vodka — it’s currently outpacing them at the higher end. Check out this telling statistic, used by Clay Risen in his report: in 2004, Americans bought just 513,000 cases of high-end tequila, but had purchased 2.39 million in 2014: a 365% increase! In the same time period for ultra-premium products, this compares to just 143% for vodka and 282% for bourbon.

Why is this? Risen links this to the wider premiumization of commerce, and the fact that consumers are more interested in artisanal products — in short, they want to know how and where their product was made — than ever before. The widespread high-quality of Mexican cuisine in the US, initially in Southern California and Texas and now nationwide, is also noted. Tick off improvements in food, and improvements in the liquor will follow — after all, why would you pair high-quality cuisine, with an undrinkable spirit? It’s another factor helping US consumers to cotton on to the fact that tequila can be a top-notch liquor.

Rob Walter of Euromonitor has backed up Fortune’s report: calling the tequila boom the “most disruptive market momentum in luxury spirits”, focusing more on the celeb-factor. If you’re intoxicated by A-list names, it’s time to take a seat: P-Diddy (De León), Justin Timberlake (Sauza 901) and George Clooney (Casamigos) have all invested in high-end tequila, and this is helping to exacerbate the luxury tequila boom in the US.

The Chinese frontier

Risen sees the next frontier, as with so many industries, as China. Traditionally a white-spirits society, with the national drink of Baijiu, China only became exposed to tequila from 2013, when President Xi Jinping lifted a trade restriction, thanks to a trade deal with Mexico. With a “clean slate”, as James Sykes of Beam Suntory has noted, all the negative connotations are non-existent, and a new culture of ‘sipping’ tequila can rise. Though he elaborates on a number of issues, notably Chinese laws and politics – Diageo’s experiences in 2014 are worth noting here – Risen sees China as a “solid bet” for tequila.

The big German problem

From the established market, to an newly emerging one, and back to one that lies squarely in the middle. Welcome to Germany. And the challenge here is hefty too. First up, there’s those pesky associations to shake off.

Indeed, the perception of most Germans have of tequila fits that pernicious cliche. “For most Germans, it’s about being sixteen, taking a shot with a pinch of salt and a lemon wedge — to cover up the bad taste, of course — and then suffering with a headache the day after”, says Miguel Fernandez, hitherto known for his work at Frankfurt’s Roomers Bar. “Tequila really is a difficult sell.” Mathias Noori, Brand Ambassador for Patrón Tequila, concurs, noting that the liquor faces “an uphill battle” in Germany.

Challenges abound in the German market. Sales are falling. Then there’s the fact that celebrity culture undoubtedly isn’t as big a sell, and there’s not the proximity to Mexico, or high standards of Mexican cuisine, as in the US either. Take Berlin, for example. Santa Maria and Maria Bonita have led to increased standards of Mexican cooking in the Hauptstadt in recent years, and have high-end tequilas on their menus, but it’s still a relatively small trend. The helping hand sherry has had from Berlin’s Spanish restaurants, or soju from Korean — a true foodie wave — hasn’t yet transpired in the Hauptstadt, or other German cities either.

Step-by-step, drink-by-drink

That’s not to say the beverage industry here isn’t optimistic — quite the opposite! The premiumization wave is happening here too, with German consumers willing to spend more money on higher-quality goods. Noori compares the situation to the US in the 90’s — the 100% agave has arrived in Germany in the last five years, and it is, as Noori has pointed out, going to be a step-by-step process to make “high-end tequila mainstream. The absolute key is to get the word out and educate consumers and bartenders alike about the indisputable facts that speak for Tequila,” he continues.

It’s undoubtedly similar to how, as Risen has pointed out, Patrón founders Martin Crowley and John Paul DeJoria spent their inaugural years going door-to-door selling the liquor, educating Americans away from the old style blends. 70% of the market, and brand-name recognition exceeding all others, speaks to the success of that tactic. Opinions don’t change overnight. In the words of Elvis, German consumers just need a lil’ education.

A choice anecdote from Bettina Kupsa illustrates how this can work. In Vienna in March to host a party for the Weltbarfrauentag at the Halbestadt Bar, she devised a only-tequila-menu. “The owner didn’t like it, but I said: I’m doing a tequila menu”. Kupsa notes that many guests were sceptical, but then became full-frontal converts. “It was a huge success”, she smiles.

The bartenders darling

Here’s what’s what: tequila is mixable, and sippable to boot. And whilst it stays relatively low-key in a mainstream sense — for now — it’s becoming a mainstay in German bars. Miguel Fernandez calls it a “bartenders’ darling”. Klaus St. Rainer, of Munich’s Die Goldene Bar, comments that it’s not yet the equal of gin in his bar, but matches whiskey. Hamburg’s 3Freunde Bar publishes a monthly menu of 10 drinks, with at least 3 tequila ones in the mix. The bar is another place consumers can learn. After all, what better place to discover you like a liquor, than through a cocktail by a high-end mixologist?

Don’t expect the explosion in sales of gin quite yet. It’s commonly agreed that that’s still the spirit riding the biggest hype wave. In the words of Rainer, however, “the days of sugar-agave blends are luckily over”. So, get yourself a Buttermilk Margharita, recommended by Bettina Kupsa, or a Miguel Fernandez recommended Tommy’s Margharita, and rest easy. Germany really is at a tequila tipping point.


Foto: Tequila via Shutterstock

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