Tequila Stocks: What is the Best Tequila in Which to Invest?

Chances are you are not George Clooney, Sammy Hager, The Rock, or Kendall Jenner. These celebrities invested in their own brands of tequila and did, or are still doing, quite well with the investment. For the rest of us, there are some basic facts to know about tequila before making an investment.

Any spirit calling itself tequila must be distilled from agave plants grown in the Tequila region of Mexico. The Mexican government assigns each distiller a four-digit number which certifies that the spirit is tequila from Mexico. The assigned number is printed on every bottle produced by Mexico's Tequila Regulatory Council.

Diageo is top shelf when it comes to liquor stocks

This British conglomerate owns some of the biggest-selling liquor brands in the world, including Don Julio, the best-selling tequila in the world, and Casamigos tequilas. Casamigos was purchased from George Clooney for $700 million in 2017. Diageo has positioned these tequilas as premium products that stand out for their authenticity, appealing to a multicultural consumer base. Diageo's portfolio features loyalty-inspiring brands which helped it weather the pandemic, especially in Europe. Diageo has been called a profit machine by some investors.

Brown-Forman: sometimes older is better

This is the home of the top ten selling El Jimador and Herradura, a tequila that's been around for 150 years, which is also how long Brown-Forman has been in business. El Jimador is marketed by Brown-Forman as the first premium tequila available at an accessible price point. The company also includes brands such as Jack Daniels whiskey and Woodford Reserve bourbon. Brown-Forman has paid a dividend to shareholders for 75 consecutive years.

Constellation Brands is more than a star with its tequila

Casa Noble was among the first tequilas to be certified as organic by the USDA. It is listed on a variety of rankers of the best-tasting tequilas in the world. Constellation has a second brand, Mi Campo, that has a lower price point than Casa Noble and is marketed toward millennials. It has additional connections to Mexico with Corona and Modelo beer. Constellation had sales of $8.615 billion for its fiscal 2021.

Tequila, along with whiskey, have been taking market share from beer and wine over the past ten years. That's something to consider when looking at these beverage companies. An alternative investment possibility is in blue agave growers. Tequila isn't tequila without blue agave.