Nothing Extra, Except the Law: The Intellectual Property Behind Tequila

 

I am trying to cut down on alcohol. Not that I drink particularly heavily, but lately I have noticed that alcohol does not seem to agree with me as much as it used to. Perhaps it is hormones, or perhaps simply one of those things that comes with getting older. Who knows?

The point is that I do enjoy a glass of wine with a meal at the weekend, or an aperitivo when meeting friends for a night out. And tequila has always been one of my go-to drinks. So, having not had tequila for a while, I decided to try a non-alcoholic alternative, one associated with my favourite Formula 1 driver. That got me thinking about something rather more interesting than the drink itself: the law behind the name tequila, because as expected, the non-alcoholic version of tequila, cannot be named tequila.

Tequila is not simply a generic name for a spirit. It is a protected designation of origin (PDO), meaning that its name is reserved for a product meeting specific geographical and production requirements. In other words, you cannot simply make a drink that tastes like tequila and call it tequila. Tequila is a Mexican denomination of origin. It is not simply about the geographical place of production, the climate and the terroir, but also the applicable traditional production and the product specification.

But let's leave the non-alcoholic alternatives aside for a moment and turn to another interesting development in the tequila market.

Nothing Extra: But what is in your tequila?

This month, I came across the rather prominent marketing campaign for ‘818 Tequila’ in the United States, featuring

Kendall Jenner, of the Kardashian-Jenner family. The campaign centres on the phrase "Nothing Extra", promoting the idea that the tequila contains no unnecessary additions and is made using just three ingredients: blue agave, water and yeast.

At first glance, this sounds like a straightforward marketing proposition. But it raises an interesting question: what exactly does "nothing extra" mean when it comes to tequila? And, perhaps more importantly, is this really something that distinguishes 818 from other tequilas?

The question becomes particularly interesting when we look at the Mexican technical standard governing tequila production.

The law: Tequila and its permitted ingredients

Under Mexican Official Standard NOM-006-SCFI-2012, which regulates tequila, the production rules allow certain ingredients to be used in a process known as abocado.

Section 4.1 defines abocado as a procedure used to soften the flavour of tequila. The standard identifies permitted ingredients including:

• Caramel colouring (color caramelo);
• Natural oak or encino extract (extracto de roble o encino natural);
• Glycerin (glicerina); and
• Sugar-based syrup (jarabe a base de azúcar).

These ingredients can therefore be used in tequila production although it does not set up the limits and conditions established. At 4.3; 4.36.2; 4.363; 4.36.4 and 4.36.5 when the normative mentions the term abocado, it always notes that the product ‘may’ be abocado providing some flexibility to producers to the extern they which to add the ingredients to soften the flavour or actually not to use it. This is where the marketing message becomes particularly interesting.

If the regulatory framework permits these additional ingredients, a brand that chooses not to use them can present that decision as a point of difference. The absence of certain permitted ingredients becomes a selling proposition.

But does that mean that other tequilas are somehow less authentic? Certainly not. The fact that an ingredient is permitted does not mean that every producer uses it, nor does its use automatically make a tequila inferior or non-compliant.

The distinction is between what the law permits and what an individual producer chooses to do.

When marketing becomes a competitive weapon

According to Global Drinks Intel, the 818 campaign should also be understood in the context of competitive positioning in the US tequila market, particularly in light of Baccardi Patrón tequila's marketing activity.

The campaign's central message, reportedly built around the idea that consumers might not realise tequila can contain glycerin, oak extract, sugar-based syrup or caramel colouring, invites consumers to reconsider what they know about their favourite spirit.

The accompanying website, What Is In Your Tequila?, reinforces that message.

And here is where I think the intellectual property angle becomes particularly compelling.

We are increasingly familiar with marketing campaigns built around claims such as "free from", "no added sugar", "no artificial ingredients" or "nothing unnecessary". These claims are not necessarily about creating a new product category. Instead, they seek to establish a point of difference by highlighting what a product does not contain.

But when the product in question benefits from a protected designation of origin, the conversation becomes more nuanced. A PDO protects the link between a product, its geographical origin and the qualities or reputation associated with that origin. It does not necessarily prescribe a single recipe or require every producer to follow an identical formulation beyond the applicable specifications.

Consequently, the law may permit a range of production practices, while individual producers compete on the basis of the choices they make within that framework.

And perhaps that is the real IP story: A protected designation of origin establishes the rules of the category, but it does not prevent producers from competing through their individual production choices withing the legal framework. Those choices can then become powerful marketing assets.