Spirits-Giant Suntory Sets Its Sights on American Tequila Market

Suntory CEO Takeshi Niinami recently announced plans to expand into the premium tequila market. Photo: TORU YAMANAKA/AFP via Getty Images

Japanese drinks giant Suntory Holdings is looking to get into high-end tequila and mezcal. The brand, which already owns Jim Beam, Yamazaki, Orangina and numerous other alcoholic and non-alcoholic beverages, has predicted growth for premium agave spirits in the American market.

“A polarization is happening in the U.S. market: one is toward the premium; the other one is less alcohol drinking,” Takeshi Niinami, President and CEO of Suntory, told the Financial Times.

Even for casual observers of the tequila industry, this shift is becoming readily apparent.  The proliferation of high-priced celebrity tequilas and the increasing popularity of aged expressions among American consumers has prompted a change in focus for the industry at large.

Rival spirits giant Diageo, who bought Don Julio in 2014 and Casamigos in 2017, have already positioned themselves for the kind of move that Suntory is currently considering.

Suntory has grabbed headlines in the past for huge acquisitions. This time around, however, Suntory is looking for a more grounded approach.

Suntory acquisition Jim Beam. Photo: Luke Sharrett/Getty Images

Eight years ago, Suntory bought Illinois-based Jim Beam for $16 billion. The deal was so big that it gave birth to new American-based subsidiary Beam Suntory, which now owns titanic tequila brands like Sauza, Hornitos, and El Tesoro.

“I don’t think we’ll take that huge a risk again in the near future,” said Niinami of the Jim Beam acquisition. Instead, Niinami indicated that Suntory would prefer to invest in existing operations in Mexico.

Suntory will likely face a competitive market in the search for its next high-end tequila brands. They’ll be facing off against Diageo as well as Pernod Ricard, all of whom will be looking for a slice of the ballooning tequila market.

Tequila supplier revenue in the U.S. grew from $1.068 billion in 2004 to $5.162 billion as of 2021.

Suntory isn’t the first, nor will it be the last to set its sights on premium tequila.

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