Tequila has become an increasingly popular spirit worldwide, with global sales growing at a rapid pace in recent years. As the tequila industry expands, it presents attractive investment opportunities for those looking to capitalize on this growth. Investing in tequila can provide exposure to the broader alcoholic beverage market while focusing on this fast-growing segment. There are several ways investors can gain exposure to the tequila market, including investing in tequila companies, ETFs tracking alcoholic beverage companies, and tequila-related real estate.
Investing in publicly traded tequila companies provides direct exposure to leading brands
Some of the major publicly traded companies with exposure to tequila include Diageo, Becle SAB, Pernod Ricard, and Brown-Forman. These global alcoholic beverage companies own top tequila brands like Don Julio, Jose Cuervo, and Casamigos. Investing in their stocks provides direct access to the growth of these tequila brands as well as their wider spirits portfolios. The performance of these stocks is driven in part by tequila sales trends and brand strength.
ETFs tracking alcoholic beverage companies offer diversified access to the tequila industry
There are ETFs such as the SPDR S&P Alcoholic Beverages ETF (BEER) that provide exposure to a basket of alcoholic beverage companies including major tequila brands. This allows investors to gain diversified access to the tequila industry. The ETF spreads risk across multiple companies and segments like beer, wine and spirits. Its holdings include tequila makers Becle and Brown-Forman among others. The performance of this ETF is partially dependent on the sales growth of its underlying tequila brands.
Investing in land and agave farms provides exposure to tequila’s raw materials
Since tequila must be produced from blue agave plants grown in certain regions of Mexico, particularly Jalisco, companies invest significantly in securing agave supply through land and farm ownership. Investors can gain exposure to the physical aspect of tequila production by investing directly in tequila companies that own extensive agave plantations or farmland in tequila producing regions. Real estate investments focused on land holdings and farms in areas suitable for blue agave cultivation can also provide exposure to the raw materials crucial for tequila production.
Direct private investment in tequila brands allows participation in the industry’s growth
Many high-growth tequila brands remain private companies making them difficult to invest in for regular investors. However, some of these brands offer private investment opportunities to accredited investors through platforms like equity crowdfunding. This allows direct investment in fast-growing small tequila companies aiming to become the next breakout brand. Though risky, investing this way provides potential for significant upside if the brand gains traction and market share down the line.
Investing in barrel aged tequila provides alternative exposure to maturing tequila
A newer trend in the tequila market is barrel aged tequila, which is aged in barrels after distillation leading to deeper, more complex flavors. This premium segment is forecasted for strong growth. Companies offering barrel aged tequila variants present an interesting investment avenue. Furthermore, some tequila producers allow direct investment in aging barrels of tequila which can then be resold to that company in the future at a premium. This provides alternative exposure to the higher-end aged tequila market.
The tequila industry is experiencing rapid growth as the spirit gains popularity globally. Investors can capitalize on this growth through stocks of major tequila companies, alcoholic beverage focused ETFs, real estate investments in tequila producing regions, direct private investment in emerging tequila brands, and by investing in the premium barrel aged tequila segment.