Heineken USA is getting into the spirit-based, ready-to-drink canned cocktail market with Dos Equis Margarita, a line extension of the imported Mexican beer brand that will hit retailers in 10 states by the end of June.
Dos Equis Margarita (10% ABV) is made with blanco tequila, lime juice and natural flavors. The offering will launch in single flavor (Classic Lime Margarita) slim can 4-packs across Georgia, New Jersey, Florida,New Mexico, New Jersey, Colorado, Massachusetts, Louisiana, New York, and Illinois, as well as Las Vegas.
“We have very high hopes for this given the momentum in the category,” Heineken USA CMO Jonnie Cahill told Brewbound. “From those 10 states, you can expect a national rollout then after that in due course.”
The brand will be imported from Mexico and packaging will feature the “crafted in Mexico with tequila” stamp after being certified by the Consejo Regulador Del Tequila (CRT), the non-profit organization that regulates tequila.
“It’s all done on location in Mexico,” Cahill said.
According to Cahill, Dos Equis Margarita gives the company an authenticated brand to compete against established RTD players such as Anheuser-Busch InBev-owned Cutwater Spirits and E. & J. Gallo’s High Noon Sun Sips. As such, Dos Equis Margarita will be priced in line with those offerings.
HUSA has been working on Dos Equis Margarita with its partners in Mexico for about six months, Cahill said. Although the company is starting with a single flavor, there are “more flavors up our sleeve,” he added.
Cahill said the idea of extending the Dos Equis brand into spirit-based RTDs came from the “Venn Diagram” of RTD cocktails posting triple-digit growth last year, tequila growing at around 20% and on the other side, and the success of Dos Equis line extensions, such as Ranch Water and Lime & Salt.
“Now we’ve opened up the gateway to the brand with lots of other ways in,” Cahill said. “Those innovations are attracting younger consumers, more women, people in geographies where the brand maybe didn’t resonate before. We feel it’s the logical next step.”
And Dos drinkers are willing to let the brand stretch, Cahill said.
“We’ve seen a real openness from Dos drinkers to try it, obviously, in different occasions,” he said. “We think that’s good because it keeps people in the franchise, but we’ve also seen that up to 70% of cocktail drinkers and 83% of tequila drinkers would be open to trying a Dos Margarita.”
In fact, Cahill said Margarita tested well with cocktail consumers, with 77% of respondents saying they’d give it a try.
“We know if we make the right product, we’ll get retrial,” he said. “As long as they’re up for trying, we’re going to deliver something they’re going to want to buy again. So there’s big openness to this space. It’s a nice next edition for the brand.
“If you’re already loyal Dos drinker, we have lots of occasion-based solutions for you,” Cahill continued. “We’re just maximizing the opportunities for people to either come into the franchise or stay in the franchise if they’re already a drinker.”