“We’re not absolutely exempt, something may happen, but at this stage I don’t see organized crime affecting the area where we operate in Tequila,” he said. “There is no evidence of any decrease in visitors to Tequila.”
The opening in October of the family’s 93-room, five-star Solar de las Animas hotel, designed like a Creole colonial house from 17th-Century Mexico, marked its most visible effort yet to attract high-income tourists.
Tequila Tastings
The company is also planning two more high-end hotels by 2018, a cultural center and more frequent routes of an express train that offers tequila tastings as the Sierra Madre mountains pass by.
The initiative complements the company’s plan to become a bigger presence in the upscale tequila market, known as ultra- premium. Cuervo has long dominated in the so-called premium tequila category -- from $20 to $35. Fitch says the Cuervo Especial brand has a two-thirds U.S. market share.
But analysts expect that growth in that segment and lower- end categories will lag the high-priced tequila, which jumped almost 16 percent last year, according to market-research firm Nielsen Holdings Plc.
Cuervo has little presence today in that upscale category after selling its 50 percent stake in its strongest offering, Don Julio, to Diageo in 2014. Cuervo acquired Diageo’s Bushmills Irish whiskey in the deal. The swap followed the collapse of merger negotiations between Jose Cuervo and Diageo.
Mexican Pesos
Domingo Beckmann said the company now is plotting to expand growth of its remaining ultra-premium brands -- including Reserva de la Familia and Maestro Dobel.
“The brands are small and it’s where we are weakest, but we believe we have the skills to grow them,” Beckmann said. “We are seeing how we can increase production and grow it more.”