Tequila Growth Is Back Again

Tequila Growth Is Back Again. But Only Certain Brands Are Winning

American spirits sales fell 3.3% in the four weeks to September 5. In the same four weeks, three tequila brands grew between 19% and 49%. The boom is not over. It has just stopped lifting every gold bottle with an Instagram account.

By Vim, Editor of 12×75

In brief

• NIQ-linked retail data for the four weeks ended September 5, 2026: total US spirits down 3.3% by dollars and 3.4% by volume.
• In the same period, LALO grew 48.8%, Cazadores 36.5% and Lunazul 19.5% by dollar sales. Don Julio fell 6.8%.
• The same three brands led in the four weeks to August 22 (LALO +50%, Cazadores +30%, Lunazul +22%), while tequila overall was flat by value and up 2.9% by volume.
• The growth is concentrated in the $20 to $35 range and in brands built on cocktails, value and authenticity rather than celebrity. Cazadores is heading for a million cases; Lunazul is near 2.3 million.
• Tequila is not shrinking. It is getting selective.

Tequila isn’t dead. It’s splitting

Start with the contrast. According to NIQ-linked retail data for the four weeks ended September 5, 2026, total US spirits sales fell 3.3% by dollar value and 3.4% by volume. That is the whole market, every category, shrinking together. Against that backdrop, several tequila labels were among the fastest-growing spirits brands in America.

This is not a single freak month. The four weeks to August 22 told the same story with the same names: LALO up around 50%, Cazadores up 30%, Lunazul up 22%. Tequila as a whole was essentially flat by value at +0.1% and up 2.9% by volume, which is the important pairing. More tequila is being sold. It is being sold at lower average prices. And the growth inside that flat total is concentrated in a small number of brands, not spread across the shelf.

The three tequila brands beating the market

Three names, three different stories, one pattern. None of them is a celebrity bottle. None of them costs $100. All three sell to people who are going to mix them.

Cazadores is heading for one million cases

This is the clearest winner in the category and the least glamorous. Cazadores is mainstream, affordable and unapologetically cocktail-first, and it has nearly doubled its US business in five years while the brands that were supposed to be the future of tequila were busy launching velvet boxes. A pineapple-infused version at $22 tells you exactly who it is for: people making Margaritas on a Friday who want the drink to taste of something and the receipt to be small.

The lesson is one the industry has been slow to accept. Growth in tequila does not have to come from the top shelf. It can come from a bottle that costs less than the cocktail it goes into at a bar, provided the liquid is honest and the brand knows its job. Cazadores knows its job. My best tequilas for Margaritas has more on why that matters.

Lunazul is quietly becoming huge

Here is the number that surprises people: Lunazul is now one of the biggest tequilas in America, approaching 2.3 million cases, and it got there without a founder you have heard of, a bottle you would photograph, or an airport billboard. It has grown roughly 40% a year for half a decade by being reliably decent, reliably available and reliably cheaper than the brands it sits next to. One of tequila’s biggest growth stories is happening entirely without the machinery the category was built on.

LALO is going mainstream

LALO is the smallest of the three and the most interesting, because it is the enthusiast’s tequila learning to scale. It built its reputation among the people who read production notes and care about additives, the crowd that usually keeps a brand small and pure and slightly resentful of success. Then Fifth Generation bought it, and Fifth Generation is the company that turned Tito’s from a Texas curiosity into the biggest vodka in America by the simple method of putting it everywhere.

At 250,000 cases it is not yet big. At nearly 49% growth from that base it is the fastest thing in the category, and it is proof that the authenticity argument the tequila nerds have been making for years can be commercialised without being betrayed. LALO looks less like a celebrity tequila and more like a tequila nerd’s favourite suddenly discovering it has distribution.

Don Julio is still huge, but falling

Now the incumbent. Don Julio remains one of the two or three most important tequila brands in the United States, the house with the real 1942 founding date, the real distillery and the tall bottle that became shorthand for expensive tequila in every nightclub on earth. Its owner, Diageo, is the biggest spirits company in the world. And in the four weeks to September 5 its dollar sales fell 6.8%, with volume down by roughly 6,400 cases.

I am not going to call that a collapse, because it is not one: a brand of Don Julio’s size loses 6,400 cases the way an ocean loses a bucket. What it is, is a direction. The premium giants that defined the last decade of tequila are softening at the same moment that challengers at lower price points are gaining, and both of those things showed up in the same dataset in the same month. My Don Julio guide still stands; the bottles are good. The market is simply telling Diageo something it has heard before, most recently from its own shareholders.

Why mid-priced tequila is winning

The category analysis behind these numbers points to the same place the three winners live: a meaningful share of tequila’s growth is now happening in the roughly $20 to $34.99 range. That is Cazadores territory. It is Lunazul territory. It is the price of a good reposado that goes into a Margarita rather than a decanter.

It would be easy, and wrong, to say price explains everything. It does not. Inflation and affordability pressure are real and consumers are visibly trading down across spirits, but the brands winning in that band are not winning only because they are cheap. They are winning because they are cheap and credible: honest liquid, clear positioning, bartender relevance, a reason to exist beyond the label. Plenty of $25 tequilas are going nowhere. The ones going somewhere have an argument. Affordability got them a hearing. The argument is what closed the sale.

Margaritas are still doing the heavy lifting

None of this happens without the cocktail. Tequila remains one of the strongest spirits categories in American bars and restaurants, and the Margarita remains the most-ordered cocktail in the country by a distance, ahead of the Old Fashioned, the Espresso Martini and the Martini. Under-35 drinkers over-index heavily on tequila. So do Hispanic consumers. Those are the two groups the wider alcohol industry says it cannot reach, and tequila reaches both, through a drink that is cheap to make, easy to order and forgiving of a $22 base spirit.

That is why the growth sits where it does. A category propped up by one cocktail rewards the bottles that make that cocktail well at a price a bar can bear. It is also why the can is eating the bottle across spirits generally: the Margarita in a can is the same logic taken one step further, and Bacardi, Heaven Hill and Fifth Generation all know it.

Tequila is starting to behave like whiskey

The most interesting observation in the NIQ commentary is not about price. It is that tequila knowledge among consumers is becoming sophisticated in a way that looks a lot like whiskey enthusiasm. People are asking about agave sourcing, about production methods, about ageing, about proof, about additives, about the distillery behind the brand rather than the face in front of it. Five years ago the average tequila buyer knew blanco, reposado, añejo and which celebrity owned what. Now a growing share of them can tell you the NOM.

That is exactly the trajectory bourbon took a decade ago, and it produced the same result: a market that stopped rewarding marketing and started rewarding provenance, where the enthusiasts’ bottles went mainstream and the mainstream bottles had to justify themselves. LALO is the tequila version of that story. So, in a different way, is the lawsuit docket, because a category whose customers have started reading the label is a category where the label had better be right. If you want to know which bottles hold up to that scrutiny, the best tequila guide is where I keep the answer.

The tequila boom isn’t over. It’s getting pickier

A few years ago, a brand could ride the tequila wave by being four things: tequila, premium, gold-bottled, and ultra-smooth, ideally with a famous name attached. That formula made a great deal of money and I have ranked every bottle it produced. It no longer works on its own. The bottles that formula built are the ones softening.

What consumers are rewarding instead is more specific and harder to fake: value, authenticity, flavour, production credibility, cocktail utility, and the approval of the people who actually pour the stuff. Cazadores has the value and the cocktail utility. Lunazul has the scale and the price. LALO has the credibility. Don Julio has the name, and the name is currently worth 6.8% less than it was.

So no, tequila is not dead, and anyone who tells you the boom is over is reading the wrong numbers. The category is still outgrowing the spirits market that surrounds it. It has just become a mature, competitive market where drinkers increasingly know what they want and are buying specific brands rather than the word tequila itself. That is not a category in decline. That is a category that has grown up, and grown-ups are harder to sell to.

Sources

• NIQ-linked US retail data for the four weeks ended September 5, 2026 and the four weeks ended August 22, 2026, as reported in the trade press
• Company and trade reporting on Cazadores (Bacardi), Lunazul (Heaven Hill) and LALO (Fifth Generation) case volumes and growth
• 12×75: the Lunazul 100% agave lawsuits, Casamigos vs Don Julio, Brown-Forman’s results

Growth figures are dollar-sales changes versus the prior-year period in NIQ-tracked US retail channels and do not capture on-premise sales. Case figures are approximate and as reported. Price-tier analysis is presented as one factor among several, not a causal explanation. Correct as of September 20, 2026. Please drink responsibly.