National Tequila Day falls on July 24, which is a great time to hoist a cocktail and perhaps to refresh your knowledge about agave-based spirits.

For starters, what exactly is tequila? Many people think that mezcal is a tequila, but tequila is actually a type of mezcal. That’s because mezcal is the over-arching category of Mexican spirits fermented and distilled from several varieties of the agave plant.

It’s produced all over Mexico under various names and designations, including tequila. Bottles labeled “mezcal” are usually from the state of Oaxaca and often have a smoky flavor due to the production process, in which the agave hearts are roasted in rock-lined pits fired by mesquite.

Bacanora is a mezcal variant made from wild plants of agave Pacifica. Raicilla is made in Jalisco state from two varieties of agave — lechuguilla and puta de mula. Sotol is another Mexican spirit that’s becoming more popular in the U.S. but it’s made with another succulent plant called Desert Spoon rather than agave.

Back to tequila: It’s a type of mezcal produced under strict regulations as to how and where it can be made. Tequila is fermented and distilled from a single type of agave plant, Agave tequilana Weber blue.

The spirit can only be produced in Jalisco, and designated areas in four other Mexican states. The best tequilas come from 100% blue agave, which is noted on the label.

Tequila styles and expressions

The main styles of tequila include are blanco, reposado, añejo, joven and cristalino.

Blanco (silver tequila) has not been aged. The flavor is agave-forward, with notes of pepper and citrus with a spicy finish.

Reposado must be aged two to 12 months in oak barrels (reposado means “rested” in Spanish). It has a smooth flavor and notes of oak, vanilla and caramel.

Añejo is aged one to four years in oak barrels (in Spanish añejo means “old” or “vintage”). It tastes richer due to the aging, with notes of vanilla and cinnamon. “Extra añejo” is tequila aged over three years.

Joven is a mix of unaged and aged tequila. It tastes similar to tequila blanco.

Cristalino, a new style that began hitting the market about a decade ago, is tequila añejo that’s filtered to remove tannins, which creates a crystal clear color. The flavor has both the complexity of aged tequila and the bright notes of a tequila blanco.

Tequila brands have been capitalizing on the interest in the spirit and coming to the market with innovative new expressions. For instance, Don Julio recently released Tequila Don Julio Rosado, aged at least four months in ruby port wine casks from the Douro wine region of Portugal, while Proximo Spirits came out with Cuervo Tradicional Cristalino in 2022.

Patrón unveiled Patrón El Alto, an extra añejo aged for four years with añejo and reposado, in November 2022. The company this past April then launched Patrón El Cielo, a silver tequila that undergoes a fourth distillation.

Campari Group this past April introduced Mayenda Tequila. The new brand’s production process includes macerating the roasted agave hearts in the base distillate and also blending with the agave “honey” released from the cooking. 

Celebrity brands and industry deals abound

Just how hot is tequila these days? The category’s volume consumption grew 11.6% in 2022, reaching 28.9 million 9-liter cases, according to the 2023 Liquor Handbook. Tequila has been increasing at an average rate of 10.9% in the past five years, and now claims a 10% share of the entire distilled spirits market.

Celebrities want in on the agave action: Kendall Jenner (818 Tequila), Eva Longoria (Casa Del Sol) and Kevin Hart (Gran Coramino) are among the latest to join Dwayne “The Rock” Johnson (Teremana), Michael Jordan (Cincoro), Rita Ora (Próspero) and George Clooney (Casamigos) and others with tequila brands.

It was in fact Diageo’s 2017 acquisition of Casamigos for about $1 billion that got the attention of many industry watchers. Bacardi’s multi-billion-dollar purchase of Patron Spirits International followed in 2018.

Pernod Ricard, which in 2018 finalized its acquisition of Avión Spirits, took a majority stake in Código 1530 in October 2022. Codigo was cofounded by American country music singer George Strait in 2016.

Heaven Hill Brands in 2022 acquired Samson & Surrey’s portfolio of super-premium brands, which included Tequila Ocho, while Diageo bought 21Seeds, a fast-growing flavored tequila infused with real fruit juice, in 2022. We’ve also seen a flurry of mezcal brand acquisitions in recent years.

Cocktail cred

While higher-end tequila has emerged as a sipping spirit in recent years, tequila cocktails dominate the bar scene. That’s because the Margarita is not only the top tequila cocktail on-premise, it’s the leading cocktail overall, according to most surveys.

Hospitality engagement platform Union’s OnPrem Insights report ranked the top tequila cocktails ordered at high-volume bars and restaurants across the country. The research found that all other tequila cocktails trail the Margarita by 20%.

The Mexican Candy shot, made with tequila, watermelon schnapps and hot sauce, is the second most-ordered tequila drink, according to Union’s research. That’s driven in part by the shot’s popularity across Texas.

Palomas come in as the third most-popular tequila cocktail. The mixture of tequila, lime and grapefruit (traditionally grapefruit soda) shows a steady consumption during all dayparts, Union says.

And Ranch Water is a newcomer, but gaining momentum. The combination of tequila, lime juice and sparkling mineral water (often Topo Chico) just arrived on the U.S. bar scene a few years ago, and takes the number-four spot for on the list of top-ordered tequila cocktails.

Here are a few cocktail recipes that use tequila, mezcal and some of the other spirits of Mexico.