RESEARCH: Why Tequila Brands Must DO Something Different to Survive

Tequila brands that differentiate effectively will survive the coming consolidation.

While alcohol consumption patterns and competitive dynamics create a challenging environment for tequila brands, there are still genuine opportunities for growth. Success requires building and sustaining a memorable, differentiated narrative that resonates with engaged consumers.

The most viable craft tequila brands will be those that transcend commodity positioning. They must offer something beyond product quality, which consumers increasingly expect. They need authenticity. They need a story. They need connection to place, process, or philosophy that distinguishes them from the thousands of competitors vying for attention. 

This narrative imperative favors smaller producers. Industrial giants struggle to convince consumers of artisanal commitment when their scale contradicts it. Craft brands, by contrast, can credibly claim direct relationships with agave farmers, traditional production methods, and family heritage. These stories matter to the consumers driving the 30 percent growth in craft tequila sales.

The effectiveness of this strategy emerges in sales data. Brands like Alma del Jaguar, G4, La Gritona, Don Fulano, and Mijenta grew Nielsen-tracked retail sales more than 40% between 2024 and 2025. All utilize an artisanal, craft approach to production, and to marketing messaging.

What stories resonate with tequila drinkers that prefer traditionally made tequila?

By far, the most compelling differentiator is additive-free status. Educated consumers overwhelmingly view freedom from artificial sweeteners, glycerin, oak extract, and caramel color as non-negotiable. Eighty-four percent of Tequila Report readers indicate that their preferred tequila must be additive-free, far outpacing any competing attribute. More tellingly, 72 percent said they would pay at least $10 more for an additive-free tequila.

For craft brands competing in the premium segment, additive-free positioning is now essential. It provides immediate credibility with target audiences and becomes the foundational differentiator upon which all other narrative elements rest. Without it, even compelling stories about heritage and craftsmanship ring hollow to informed consumers.

Yet three massive challenges undermine additive-free as a viable long-term differentiator.

First, the verification crisis. The ongoing dispute between the Consejo Regulador del Tequila and the Agave Matchmaker website has destroyed any unified source of truth. No fully public, universally accepted registry now documents which tequilas contain additives and which do not. This verification vacuum has real consequences: nearly all smaller brands now claim additive-free status, yet many of these claims collapse under sensory analysis.

Second, the differentiation disintegration. When so many brands claim to be additive-free, the attribute ceases to differentiate anything. The now unofficial Agave Matchmaker list - the only credible verification attempt - contains 129 brands³ as of January 2026. Yet approximately 900 viable competitors operate in the category. Only 14 percent have been verified as additive-free. At least double that number claim the attribute. Additive-free has become a checkbox, not a differentiator. It is the new "100% agave."

Third, the regulatory prohibition. The CRT has demanded that tequila companies cease mentioning additives or "additive-free" status in marketing. Their position is unambiguous: since no CRT-approved additives test exists, no claim of additive-free status carries validity.⁴ 

A criterion that matters deeply to consumers cannot be definitively ascertained, can be claimed by any competitor, yet can only be discussed in whispers due to regulatory prohibition.

If additive-free cannot sustain competitive differentiation, what alternatives remain?

Some brands emphasize environmental sustainability or organic agave certification. Female-owned or female-produced brands underscore that positioning. These narrative building blocks lack broad resonance. Only 20 percent of survey respondents cite these attributes as reasons for choosing a go-to brand.

The Tequila Report's Spring 2025 report⁵, "The Tequila Seekers," surveyed more than 1,200 American tequila consumers about specific brand attributes. Results proved sobering. Beyond additive-free status, half or fewer tequila consumers cared about any other attribute tested, including whether the brand was owned by the distillery, owned by Mexican nationals, made by a woman, owned by a woman, used organic agave, or any other characteristic.

Even educated consumers show little passion for ownership structures, maker identity, or sustainability claims beyond additive-free. These narrative anchors simply do not move purchasing decisions.

This raises an urgent question: On what foundation can tequila brands build memorable narratives that drive loyalty and premium pricing?

The answer lies in production and innovation approaches. How tequila is made, what agave varieties are employed, which fermentation techniques are deployed, what barrel aging decisions are made - these production choices offer genuine differentiation potential. They reward close consumer attention. They justify premium pricing. They cannot be easily replicated or claimed by competitors.

Brands that master the craft of their production process and translate that mastery into compelling, authentic storytelling will be the ones that survive consolidation.

Producers face the same differentiation challenges as brand owners, and some distilleries are investing in equipment that enables production methods increasingly valued by educated consumers.

Sergio Vivanco & Associates (NOM 1414) recently installed a tahona - the volcanic stone wheel used to crush cooked agaves through labor-intensive, traditional methods. The equipment now serves their house brand, Viva México, and contract brands including Lost Lore, with measurable success.

Hacienda de Oro (NOM 1522) has deployed a stone oven alongside its existing steel autoclave pressure cooker. Consumer attitudes often suggest that stone ovens impart superior flavor complexity compared to modern autoclaves. One of their distillery-owned brands, Amatitense, is now using this new production option.

Familia Landeros distillery (NOM 1599) also recently commissioned a stone oven, expanding production options for Atanasio, Valor, and potentially new contract brands seeking differentiated production pathways.

Even industrial producers recognize production method differentiation as a viable strategy. Maestro Dobel, a Cuervo-owned brand ranking in Nielsen's top 30 overall, recently launched a tahona-crushed blanco tequila claiming additive-free status using the "only three ingredients" linguistic framing - code for “additive-free”.

Notably, the new tahona blanco commands a 17 percent price premium over Maestro Dobel's conventional blanco. Yet questions linger about provenance. The distillery currently lacks a tahona on-site, raising questions about production authenticity and sourcing.

Beyond distillery equipment, other production differentiators are emerging across the industry.

Water sourcing presents one avenue. El Pandillo (NOM 1579) leverages three distinct onsite water sources, each contributing unique mineral profiles to their spirits. Cazcanes takes a different approach, trucking in proprietary spring water weekly to their distillery, Tequilera TAP (NOM 1614), ensuring consistency and specific flavor characteristics.

Fermentation strategy offers another differentiation path. Some brands employ unusual yeast strains or novel fermentation processes to create distinctive flavor profiles and compelling narratives.

Alto Canto's high-elevation distillery naturally slows fermentation, producing extended development periods that shape flavor complexity. Among others, Amatiteña relies exclusively on wild yeast fermentation, eschewing commercial cultures entirely. Rimari has adopted sake yeast in tequila production, an unconventional choice that generates genuine novelty and consumer interest.

These production choices - water sourcing, yeast selection, fermentation methodology, and beyond - cannot be easily replicated or casually claimed. They require genuine operational commitment, and partnership between brand and distillery. They reward close consumer attention and justify premium pricing. They create authentic differentiation in an increasingly crowded marketplace.

Summary: Brands that master production nuances and communicate them effectively will possess competitive advantages that extend far beyond additive-free claims or ownership narratives.

But to do so requires brands to actually DO something different, not just SAY they are different.

³ The test results from Agave Matchmaker are not made publicly available, and it is uncertain if all 129 brands have been tested. 

⁴ The Tequila Report maintains a data-sharing relationship with Agave Matchmaker and recognizes the Consejo Regulador del Tequila as the sole current regulator of tequila production. Like many tequila content creators, The Tequila Report advocates for greater transparency and documentation of production decisions, whether led by the CRT or voluntarily adopted by distilleries and brands.

⁵ The Spring, 2025 report was created by us for our slingshot division. slingshot is an invitation-only collective of craft tequila brands working together to share best practices. slingshot is owned by the same parent company as The Tequila Report, and shares the same co-founders and directors.