The tequila and mezcal sectors may soon face serious upheaval in the U.S. market due to proposed tariffs on Mexican imports. Recent data obtained by Reuters shows that tequila and mezcal, ship around US$4.66 billion worth of product annually to the U.S., based on Mexican customs data.
Donald Trump’s plan to impose a 25% tariff on Mexican goods, aimed at addressing trade imbalances and illegal immigration, would likely force importers to raise prices on these spirit categories. Tequila and mezcal have played a major role in the booming U.S. cocktail scene, so any price hikes could have a ripple effect across the drinks industry.
Data from the Distilled Spirits Council of the United States (DISCUS) shows U.S. spirits imports hit $4.66 billion in 2023—an increase of 160% since 2019. DISCUS warns that additional tariffs would threaten jobs, and has stated its intention to seek an exemption from the proposed 10% universal tariff on all foreign goods.
Among those heavily exposed is Diageo, which shipped over 25 million liters of tequila to the U.S. last year, encompassing brands such as Don Julio, Casamigos, DeLeon, and 21 Seeds. This translates to roughly 33.7 million 750 ml bottles, including everything from affordable blancos, to premium expressions.
Diversification into International Markets
In the face of potential U.S. trade disruptions, diversifying into international markets can serve as a crucial hedge against unexpected changes in tariffs or domestic policies. Drawing from Master Distillers’ insights, brands that focus on:
- Building Brand Recognition and Authenticity
Emphasize the history, heritage, and craftsmanship behind each product to resonate with global consumers. Authentic storytelling helps distillers stand out in competitive marketplaces. - Forging Strategic Partnerships
Collaborate with distributors, importers, and local influencers in key international markets. Strong on-the-ground alliances accelerate brand visibility and market penetration. - Adapting to Local Tastes and Preferences
Tailor product offerings and marketing strategies to align with regional palates and drinking habits. In some countries, cultural nuances can make or break a product’s success. - Strengthening Global Supply Chains
Streamline manufacturing, logistics, and shipping by establishing regional hubs or alternate production sites. This reduces reliance on a single country or port of entry. - Investing in Innovation
Experiment with new flavor profiles, premium line extensions, and limited-edition releases to capture worldwide attention. Novelty products can spark consumer interest and command higher price points.
By adopting these strategies and proactively seeking new markets, tequila, and mezcal brands can mitigate the risks posed by U.S. tariffs and continue thriving on a global scale.
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