At first glance, any attempt to carve a new niche in the burgeoning US Tequila market, well ring-fenced by the big boys, would appear like ‘tilting at windmills’ – launching a new brand there would look counter-intuitive to most people.

Not so in the playbook of the protagonists of Loca Loka Tequila: celebrated Indian actor Rana Daggubati, celebrated music composer Anirudh Ravichander and Harsha Vadlamudi, the brain behind Ironhill Breweries. They have moved into this venture with a boldness and confidence that typifies today’s youth, where challenges are welcome and taken head on.

But the ‘can do’ attitude that epitomises the celebrated trio is backed by well-researched data and a confidence that they would have the backing of the retail trade in the US, which has a sizeable Indian presence and the support of the well-heeled Indian diaspora.

The transformation of Tequila from a casual party drink to a refined, high-quality spirit has played a significant role in this trend. High-priced Tequilas are now rebranding themselves as sipping liquors, appealing to a more discerning clientele that values complexity and quality.

The US tequila market is expected to expand significantly, with a projected growth of 89.21 million litres at a CAGR of 5.99% from 2022 to 2027. Leading brands like Patrón, Don Julio and Casamigos dominate the market; but new entrants like Loca Loka are poised to make their mark through strategic alliances and innovative approaches.

Cultural fusion

At its core, Loca Loka represents more than just a high-quality Tequila; it embodies a cultural fusion that resonates deeply with its target audience. “The idea behind Loca Loka was to create a Tequila that blends the rich traditions of Mexico with the vibrant cultural essence of India,” says Vadlamudi.

The name itself is a testament to this amalgamation, combining the Spanish word ‘Loca’ (meaning ‘crazy’) with the Sanskrit word ‘Loka’ (meaning ‘universe’), effectively translating to ‘crazy world’.

Daggubati, known for his successful film career, has been a long-time enthusiast of beverage alcohol. His interest in the spirits industry, particularly Tequila, evolved from personal consumption to a serious business venture.

For Daggubati, the move into the Tequila market was inspired by Western celebrities like George Clooney and Dwayne Johnson, who have successfully launched their own spirits brands and, closer home, Shahrukh Khan who has stakes in the D’yavol vodka project.

Brand building

Ravichander, whose musical prowess is renowned across South India, joined the Loca Loka team to integrate his artistic influence into the brand’s marketing strategy. With a massive following that includes over a billion streams of his hit song “Kolaveri Di”, Ravichander brings significant reach and influence to the brand.

His upcoming US tour will be pivotal for Loca Loka, as it aligns with the brand’s launch in American cities. “Music and alcohol go hand in hand,” Ravichander notes, emphasizing the synergy between his musical career and the brand's marketing efforts.

His involvement aims to enhance Loca Loka's visibility and appeal through live performances and potential collaborations, making the brand more relatable and engaging for its audience.

Vadlamudi, whose background spans both the alcobev industry and advanced business education, has been instrumental in shaping Loca Loka’s market entry strategy. His observations from his time at Harvard and subsequent data analysis indicated a growing interest in Tequila, which led him to initiate this venture.

“We are focusing on key markets within the US, particularly those with a significant Indian Diaspora, to establish a strong foundation before exploring further expansion,” he says.

The Blanco variety is priced at $45.99 per bottle, while the Reposado is available for $55.99 in the US. With a distinctive profile, the Reposado has resonated well with retailers.

India strategy

Loca Loka is crafted in Arandas, Mexico, a region renowned for its high-quality agave and traditional distillation methods. Vadlamudi and his team have partnered with the master distiller of Cazadores, whose expertise has been instrumental in creating Loca Loka.

“Our tequila is produced by the grandson of the master distiller behind Cazadores,” Vadlamudi shares. “We are 100% additive-free and use only blue agave,” he emphasises, highlighting the brand’s commitment to purity and excellence.

When it comes to pricing, Loca Loka Tequila is positioned as a mid-premium option in the US market. The Blanco variety is priced at $45.99 per bottle, while the Reposado is available for $55.99. The Reposado is matured in a blend of American and French oak barrels, creating a distinctive profile that has resonated well with retailers.

As for the India market, Loca Loka’s pricing strategy is still under development. Given the complexities of import duties and local taxes, the pricing in India may be higher compared to the US, but the team is working to strike a balance that ensures the product’s competitiveness while maintaining its premium quality.

“Launching in India is not a faraway dream. If we decide, we can do it in the next three months,” Vadlamudi says. “We have a business plan in place, but the dynamics may change as we progress.”

With a dedicated team and a clear vision, Loca Loka is set to make a significant impact on the global spirits landscape, offering a distinctive experience that celebrates both Mexican and Indian traditions.