Celebrities have helped make this Mexican drink a must-have luxury good and for one enterprising figure in the business of top-tier drink, aged tequila is an exciting growth market in the US and rest of the world. And like fine wine and whisky, it comes with investment return possibilities.

Fine wines and whisky have caught headlines with their sometimes jaw-dropping prices for certain brands and vintages. And now there’s a new kid on the block: Tequila.

Tequila is the fastest growing spirit category in the world. The industry is large in value terms already: global sales in 2023 stood at $16.5 billion in 2023. (In absolute terms, of course, the industry will have to grow fast to catch up with total revenue for the world's wine market. Covering the whole spectrum of varieties and price brackets – wine revenue was $339.1 billion for 2024, according to Statista.)

An example of aged tequila

High-grade, aged tequila – which has a brown colour – is a very aspirational sort of drink; it also has a younger client image than is the case with whisky and fine wine. Film, sports and music industry stars such as George Clooney, Justin Timberlake and Michael Jordan have got into the act. For example, Clooney founded an American company, Casamigos, or Casamigos Tequila; Dwaine “The Rock” Johnson has developed Teremana Tequila. Hollywood has big pulling power around the world. Tequila is seen as fun and young.

And aged tequila is a market that has drawn the attention of Samuel Gordon (main picture), co-founder and CEO of GORDON PWC. Gordon is a licensed securities broker under FINRA series 63, and 82. His business launched whisky cask investment as a regulated investment in the US under SEC guidelines for the first time in history in 2023, and is set to launch tequila cask investments under the same model later next year.

Gordon was clearly excited about prospects when he recently spoke to this publication. Based in Miami, Florida, he also spends time in Mexico where the drink is made.

“There is a real investment opportunity here…this market is projected to produce a compound annual growth rate over the next eight years of about 11 per cent and sales will reach $42 billion at this rate by 2032,” he said. 

"Tequila cask investment offers a unique alternative compared with other similar assets due to its short-term nature (up to three years) and potential for higher-than-average returns. For investors in the UK, these benefits are amplified due to its ‘wasting asset’ status, similar to whisky, that makes it exempt from capital gains tax,” he said. 

The market is driven by forces such as “premiumisation” – a desire for people to own aspirational brands – and globalisation as well as the worldwide spread of an affluent middle class. These factors are increasing demand for aged tequila such as anejo (one-year) and extra anejo (three years) tequilas. “People are drinking less [alcohol] but when they do, they are spending more and going for quality,” he continued.  

The business model that Gordon has developed was derived from his whisky cask business. “It can really be used with any spirit that gains value with age, such as whisky or tequila. Markets must also be extremely well regulated with a denomination of origin and strict guidelines to really make it investable though as it protects the quality and authenticity of the industry, both essential when making an investment.”

Background
Gordon has a background in the luxury drinks industry, such as in Scotch, Japanese and Irish whisky; he gained a knowledge of markets where there is high demand and fine supply, particularly for aged spirits.

During time spent in the US, Scotland-born Gordon found out about the high-end tequila world. 

“Seeing what it became in the US sparked my interest,” he said. 

After analysing the market for a year and travelling to places in Mexico where the drink is produced, Gordon became involved in the tequila business. The US market is big, but there is more upside and in particular, large potential for growth around the world, he said. 

At present, about 75 per cent of all tequila is drunk in the US. Given the relative maturity of the market, the compound annual growth rate is likely to decelerate in the US in terms of sales, but markets outside the US are set to keep growing quickly at double digit CAGR – for example in the UK, Spain, Canada, parts of Asia, China, Australasia and India, Gordon reckons. 

The structure and economics of this market are important. There is a limited number of distilleries versus brands (only 75 active distilleries versus over 2,800 brands), long agave [plant] growth cycles (seven and more years), and extended production times are required to produce aged tequila. 

How the model works
Under the traditional business model, distilleries produce the tequila for the brands, which means that they have to wait at least seven years to grow the agave before they can produce. Consequently, they need to sell what they produce as quickly as possible (normally as "blanco" unaged tequila). However, the brands have a rising demand for aged tequila. 

Harvesting the agave plant

“Our model is to buy the blanco from the distilleries in casks to provide them with the cashflow they require. We then enable our clients to buy the blanco from us and let it age in the bonded warehouses in casks for up to three years. Once it is aged we then sell it for our clients to the brands to meet the demand,” Gordon said.

A typical tequila barrel

There are two brand types, Gordon said. Firstly, "unlike the very largest multinationals that own drink brands (Diageo, etc), many of the tequila brands don’t own distilleries or warehousing for ageing their own tequila, making it very expensive and challenging for them to do so. They essentially operate a buy today, bottle tomorrow business model and we plug the gap for them." In the second case, he said, "the big multinational brands have a challenge – because demand for tequila is so high it is very difficult for them to age enough of it. We can plug a gap even for these brands.” 

There are certain risks – such as an adverse turn in the market – clients’ barrels are insured against any loss or damaged to their casks during the term. Investors must put in at least £2,300 ($3,073) for a cask, and typically people invest in 10 casks each – £23,000 to enter the market. The holding period while the drink is ageing is one to three years.

Under Gordon’s business model, investors are looking at a return on investment, after fees, of above 15 per cent; his firm charges a 10 per cent performance fee on the profits made when the tequila is sold. 

Demand to take part in the investment pools is strong; a round of fundraising for 100 casks was closed in 48 hours recently, Gordon said.

Today, owners of such fine goods want to know about the sustainability angle, and how local communities are affected. In this time of ESG investing, such considerations cannot be ignored.

“We generally try to work with distilleries that are extremely conscious of their water waste, which is a big issue in the industry right now as it can contaminate the soil if not disposed of properly. Some distilleries have initiatives where it can be used in creating bricks for properties,” Gordon said. 

The potential of this market is large. 

“We are talking about a market that’s expected to grow to over $42.5 billion by 2032, with much of this growth being driven by rising demand for high-quality, aged tequila. The industry is expanding its production capacities to meet these requirements but the brands still need to be able to source the aged tequila to support this growth, and that’s where we come in,” he added.