UK-based Tequila company El Rayo has secured its first listing at a major supermarket after partnering with Sainsbury’s.
Founded in 2019, the business will sell its Plata expression in 400 UK Sainsbury’s stores at an RRP of £34 ($42.37). It will be the first Tequila at the supermarket to be priced at over £30, El Rayo said. The Plata variation is marketed to be served with tonic water, much like gin.
“There’s plenty to do there. We’ve only launched one SKU with them so obviously, it’ll be great to get a second SKU,” co-founder Tom Bishop said regarding the partnership with Sainsbury’s.
“So, I think for us, the main message is just absolutely knock it out of the park with Sainsbury’s this year and see where that takes us.”
Regarding El Rayo’s strategy over the next twelve months, Bishop explained how on-trade sales remain important to the business.
“In terms of growth, those [on- and off-trade] are the two big focus channels for us – a combination of launching with Sainsbury’s and increasing distribution in the on-trade, both from a volume perspective but also from a footprint perspective.”
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The company has also recently launched with Hammonds, a drinks wholesaler based in the north of England, and two other wholesalers in Scotland. The Tequila is served at over 500 on-trade venues.
Outside the UK, El Rayo is available on Amazon in Germany and through online retailer Tastillery, but there are no firm plans to expand further internationally for the time being, Bishop said.
When asked about high agave prices and potential supply chain issues for the booming Tequila market, Bishop said that the brand has not suffered too badly.
“It’s been a challenge. I don’t think anyone in the Tequila category will tell you differently and, if they are, they’re probably lying,” Bishop said.
“It’s a challenge we’ve managed quite nicely as a brand. We probably came in at quite a nice time. I think there’s already been quite a significant increase, so, we could position the brand from a price perspective accordingly. And I think we’re probably not at the size where we’re massively overexposed.”
Bishop added: “Who knows what the next 12 months hold? I’m not going to sit here and say that it [price point] is set in stone because I don’t think anybody can but, at the moment, we’ve been able to resist any price increases, which potentially is not the same for every other brand, but we just feel quite passionately about our price point.”
Bishop and co-founder Jack Vereker secured an £870,000 investment at the beginning of this year and said that the company will likely look to raise more funds this time next year.
According to a report from GlobalData, the Tequila and mezcal industry in the UK is expected to reach a value of £142.7m in 2026, growing at a CAGR of 4.3% from 2021.