Tequila’s Stunning Rise: How It Shot Up in U.S. Popularity
Americans are drinking more and better-quality tequila, and not only in margaritas on Cinco de Mayo.
Tequila sales have been growing at an average rate of 5.6 percent a year since 2002, according to February figures from the Distilled Spirits Council of the United States. In 2014 alone, 13.8 million nine-liter cases were sold.
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The U.S. represents tequila’s largest market, with about 52 percent of global sales. America’s renewed thirst for mixed cocktails has been a boon for spirits overall, but especially for tequila. Meanwhile, sales in Mexico have remained flat largely because the market there is mature, with little room for growth.
The Distilled Spirits Council said that one of the keys to tequila’s U.S. growth has been distillers’ ability to offer a product for every budget and occasion, but the fastest growth has been in high-end and super-premium brands.
“High-end brands have grown 189 percent in volume since 2002,” it noted. “Virtually unknown in 2002, super-premium tequila volumes have skyrocketed 568 percent and today account for 2.4 million 9-liter cases.”
Celebrity endorsements may have also raised the status of tequila. George Clooney, Sean Combs and Justin Timberlake have all promoted tequila brands.
In addition, distillers are trying to boost the popularity of high-end tequilas further by offering tastings and tours — at least one of which is aimed at the super-wealthy.
Tequila Avion, an ultra-premium tequila maker, is offering a $500,000, three-day trip for 10 to Jalisco, Mexico, to taste its spirits and partake of luxury accommodations, butler service and a private dinner among other amenities.
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If that seems a tad pricey, Experience Tequila in Portland, Ore., offers four-day tours to Mexico for just under $1,500, and you can find tequila-tasting classes in many cities for about $100.
Chart of the Day: SALT in the GOP’s Wounds
The stark and growing divide between urban/suburban and rural districts was one big story in this year’s election results, with Democrats gaining seats in the House as a result of their success in suburban areas. The GOP tax law may have helped drive that trend, Yahoo Finance’s Brian Cheung notes.
The new tax law capped the amount of state and local tax deductions Americans can claim in their federal filings at $10,000. Congressional seats for nine of the top 25 districts where residents claim those SALT deductions were held by Republicans heading into Election Day. Six of the nine flipped to the Democrats in last week’s midterms.
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Ten companies, including nine pharmaceutical giants, accounted for half of the health care industry's $50 billion in worldwide profits in the third quarter of 2018, according to an analysis by Axios’s Bob Herman. Drug companies generated 23 percent of the industry’s $636 billion in revenue — and 63 percent of the total profits. “Americans spend a lot more money on hospital and physician care than prescription drugs, but pharmaceutical companies pocket a lot more than other parts of the industry,” Herman writes.
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Federal, state and local governments spent about $441 billion on infrastructure in 2017, with the money going toward highways, mass transit and rail, aviation, water transportation, water resources and water utilities. Measured as a percentage of GDP, total spending is a bit lower than it was 50 years ago. For more details, see this new report from the Congressional Budget Office.
Number of the Day: $3.3 Billion
The GOP tax cuts have provided a significant earnings boost for the big U.S. banks so far this year. Changes in the tax code “saved the nation’s six biggest banks $3.3 billion in the third quarter alone,” according to a Bloomberg report Thursday. The data is drawn from earnings reports from Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.
Clarifying the Drop in Obamacare Premiums
We told you Thursday about the Trump administration’s announcement that average premiums for benchmark Obamacare plans will fall 1.5 percent next year, but analyst Charles Gaba says the story is a bit more complicated. According to Gaba’s calculations, average premiums for all individual health plans will rise next year by 3.1 percent.
The difference between the two figures is produced by two very different datasets. The Trump administration included only the second-lowest-cost Silver plans in 39 states in its analysis, while Gaba examined all individual plans sold in all 50 states.