Finding the right partners

“We knew we wanted to use a 100% Agave tequila base with a brand that embodies the culture of Mexico, but we’re both American founders, so it wasn’t going to be our history with Mexico. We set out to find the right partner to educate us and influence the product.” Furthermore, the co-founders explain, to create a 100% Agave cocktail, the product has to be made in Jalisco, Mexico from start to finish. “We started cold-calling people in Mexico and asking, ‘Hey, can you do this,” and eventually one guy said yes.”

After this phone call, Walsh and Mooradian flew down the next day and met with their now co-packer. From there, they needed to find a tequila, so their co-packer brought them to tour several distilleries in Jalisco. “We went to one called El Mexicano. We hit it off with the family’s son Willie, who is our age, and we tasted their tequila and it was excellent…They were skeptical in the beginning — we were these guys who wanted to put the tequila that they worked so hard on in cans. But they had considered an RTD before and they thought we might be the right partnership to make it happen in the US market.”

“Fast forward, Willie and his family are now equity partners in our business. We license their tequila, which is a certified additive-free tequila. We were very lucky that they decided to give us a shot because it makes or breaks the whole cocktail. [Tequio] is just tequila, sparkling water, and a hint of lime. We don’t mask the tequila with heavy fruit flavors like a lot of the competitors in the category because we have this delicious tequila as the foundation.” From their distillery in Mexico, Tequio then goes on a long road to make its way to consumers in the US. It is currently distributed in California, but, Walsh explains, “We also ship online to 31 states and have a small distribution in our hometown in Northern Michigan for our friends and family.”

The uphill battle in retail

The premium nature of Tequio’s product comes with a higher price point, which, Walsh explains, has forced them to be specific about the accounts they target. “When you come in with a four-pack that retails for 25.99, it can be an uphill battle. There is an education component to it — certified additive-free tequila is a new thing on the market, so people who are used to other brands ask, ‘Why this is better than any other tequila?’ [Tequio] is the cleanest tequila you can have, and we lean into that in making people understand our value proposition.”

“The biggest thing we’ve learned over the last six months is where [Tequio] fits in the market. It’s never going to work at a seven-eleven. We’re focusing on the channels and accounts with premium consumers who won’t be scared away by the price point. Erewhon has been a very good indicator of our movement — we have been the best selling canned cocktail there for the last 4 months. We also just got authorization for Whole Foods and Total Wine.”

The process of breaking into retail is incredibly time-intensive, Mooradian says,  “It took us six months to get Erewhon to give us a shot. Some people understand our product better than others, but it’s still an uphill battle. Every account that Louis and I have set our mind on, we’ve gotten, but it requires time management because there are only so many accounts we can go after alone. It takes a lot of time.” Mooradian and Walsh also prioritize in-person events and sampling when it comes to moving Tequio off the shelves. “Three days a week you will see us at Erewhon or other grocers doing tastings, and that’s the backbone of our business — boots on the ground doing tastings and events as much as we can.”

Looking into 2024-2025, Walsh says, “We’re focused on Southern California and building a dense footprint here. We want to establish Tequio as a brand that is a key player in the premium spirits-based RTD category. From there, we want to grow the team and find an experienced salesperson to help us grow that footprint across SoCal.”

Advice for fellow founders

“One of our early investors told us, ‘However much time you think something is going to take, it’s going to take double.’ And that’s one line we are constantly going back to and that has been played out over and over again. Our first shipment from Mexico sat at the border for 45 days because of missing documentation…So we try to take that learning forward. We think it’s going to take us X amount of time to saturate the market in LA, but let’s give ourselves a big buffer.”

“On the opposite end of that,” Walsh says, “I heard a CEO say in an interview the other day that there is always more time. Don’t feel like you have to rush just because you think you need to get something to market ASAP. There is always more time.”