Shots are the way most Americans drink tequila. Herradura's educational push is out to change that
On most every fashionable cocktail menu, tequila selections go on for columns, competing for page space with high-end cognacs and single-malt scotches. But connoisseurs aside, US consumers can name only a few tequila brands, and most drink the distinctly flavored liquor as a shot or with fruity syrups as part of a blended margarita.
"Tequila can be enjoyed and appreciated if [you] learn to drink it properly," says Michael Olguin, president of Formula. The firm's LA office represents Herradura, a premium tequila brand whose subtleties, says Olguin, can be tasted "even in flavored margaritas. You just have to learn the nuances."
Herradura prides itself on those nuances. A distilled spirit made from 100% blue agave, its tequilas are prepared under the supervision of the Romo de la Pena family, who have owned the company since 1870. Near Guadalajara, Mexico, Herradura's mountainside hacienda headquarters is a hybrid of old and new: As horses graze beside acres of agave plants and workers haul barrels over cobblestone paths, the tequila-making process is finalized in a modern production plant just yards away.
But such images don't matter to a cocktail drinker with endless choices. With Formula's help, Herradura is seeking to expand awareness in the US, particularly via educational efforts aimed at high-end spirits enthusiasts.
Formula's outreach focuses on national consumer, luxury, and business titles. It holds tequila tastings hosted by Valdemar Cantu, Herradura's LA-based director of international marketing. At each event, flights of the brand's three staple products - Silver (aged 40 days), Reposado (aged 11 months), and Anejo (aged two years) - are sipped and discussed. Cantu suggests mixed-drink alternatives to margaritas, as well as food-pairing options. All the while, Cantu is available for journalists' questions.
In addition, Cantu says, editors from many affluent consumer-targeting titles have been invited to spend time at the hacienda, touring the grounds and witnessing production.
These intimate informational sessions have helped raise awareness. "Herradura is a brand with lots of history," Cantu explains. "I don't want it to be a secret any longer."
From songs like Jimmy Buffett's Margaritaville to Joe Nichols' Tequila Makes Her Clothes Fall Off, the at-times fiery beverage has long been a pop-culture staple. While the overall tequila market is dominated by Cuervo and Sauza (whose best-selling products are "mixtos," tequilas with added sugars and coloring), beverage analysts agree that the premium tequila segment is currently a driving force. According to the Mexican Tequila Regulatory Council, sales of 100% blue agave tequila grew by more than 34% from 2001 to 2005.
With the introduction of ultra-premium tequilas from well-known makers such as Sauza and Patr—n, Cantu says, it's vital that Herradura stands out. The company saw the trend coming about four years ago, Cantu says, when it first added above-the-line outreach efforts to its standard distributor and importer marketing programs. "We have to reach consumers directly," he says, noting the importance of PR and buzz generation among Herradura's current marketing mix.
Olguin adds that although most Herradura offerings aren't price restrictive - depending upon variety, bottles range from $20 to $60 - the company isn't looking to be "a big volume brand. It's the kind of product [for] an individual that really appreciates the taste."
To that end, Formula has made efforts to build word of mouth among "the high-end tastemakers, hipsters out there looking for something unique," he says. One way to do it, Olguin notes, is celebrity endorsements.
To take advantage of what Cantu calls celebrity "ambassadors by discovery," the firm has reached out to Hispanic influencers such as Salma Hayek and George Lopez. Formula has arranged "celebrity-oriented, behind-the-scenes events" and co-branding initiatives, Olguin says, in key markets including California, Texas, Chicago, New York, and Miami. Still, both Formula and Herradura intend to remain cautious in terms of endorsement opportunities.
"Like other fashion and lifestyle products, the liquor industry is very driven by endorsements," Cantu notes. "There's no denying that a celebrity can help you build a brand, but it must be the right fit." Herradura won't send samples to, say, Larry the Cable Guy.
While tequila will "probably always be perceived as second to vodka," Olguin says, with consumers' interest in premium spirits on the rise, there is indeed a niche for Herradura among trendsetters. As Olguin observes, "It's just not cool to stand around in a nice suit and hold a beer bottle."
At a glance:
Company: Casa Herradura Tequila
Owners: Romo de la Pena family
Headquarters: Guadalajara, Mexico
Importer: Sazerac Co., New Orleans
Revenues and latest earnings: Private company; valued at more than $800 million by industry analysts
Competitors: Patr—n, Sauza, Jose Cuervo, El Diamante
Key trade titles: Adams' Beverage Dynamics, Stagnito's Beverage Industry, Tequila Aficionado
Marketing budget: $5 million-$6 million (split with El Jimador, a Hispanic American-targeted mixto)
PR budget: Undisclosed
Ruben Aceves, VP intl. sales/marketing
Valdemar Cantu, Director of intl. mktg.
Robert Martinez, Field mktg. manager
Marketing services agencies:
PR agency: Formula, Los Angeles
Advertising agency: Creative handled in-house; Delta handles media