Agave Spirit of MEXICO
Can Tequila Growth Continue Sustainably ?
By Kyle Swartz
Tequila and mezcal sales have remained red hot in the U . S . This combined category grew 17.2 % in 2022 , according to the Distilled Spirits Council of the United States ( DISCUS ) in their annual economic briefing in February . That gain represented $ 886 million in additional revenue , totaling $ 6 billion . By comparison , the much-vaulted American whiskey category was up 10.5 % last year , for a gain of $ 483 million and a total category revenue of $ 5.1 million .
By any measure , tequila has become a primary catalyst for the spirits industry . Premiumization helps greatly . Rising consumer interest in this category is driven largely by a growing taste for top-shelf bottles .
“ More than 60 % of the spirits sector ’ s total revenue was from sales of highend and super-premium spirits , mainly led by tequila and American whiskey ,” says Christine LoCascio , DISCUS Chief of Public Policy & Strategy , in a press release . “ While many consumers are feeling the pinch from inflation and reduced disposable income , they are still willing to purchase that special bottle of spirits , choosing to sip a little luxury and drink better , not more .”
It ’ s a scenario playing out at bars , restaurants and beverage alcohol retailers nationwide . Ask nearly any employee at one these businesses about who is buying premium tequilas — what is the category ’ s demo — and the answer is : everybody . Like High Noon , tequila has attracted interest from all walks of consumer life . Everybody has made room in their budget for a nice bottle of tequila .
While superb for sales , this category growth does come with a caveat . What does this all mean for the agave plant and its surrounding environment in Mexico ? Is the tequila boom sustainable , long term , in an eco-considerate manner ?
After all , consider this : The grains that comprise whiskey mash bills , like corn and barley , will grow to maturation in a matter of months . Even the most sluggish of these , rye and wheat , are ready for harvest somewhere between four to eight months . This a time commitment easily manageable from a sustainability standpoint .
However , Blue Weber agave , the base ingredient in tequila , has a maturation period of five to nine years . And that can be considered a short timeframe in the world of agaves . Other agave plants may need more than a decade of growth before fully ripening . That is a stark difference from the months required for the critical grains within whiskey or vodka .
Such long maturation periods make sustainable tequila production a tricky exercise . Ever since the category began its meteoric rise in recent time , an inconvenient question lingers in the background : At what point does spiking consumer interest and sales bring harm to the plant ?
AGAVE SHORTAGES : NATURAL ? Possible negative consequences are visible on retail shelves today . Stocking certain tequila brands has become more difficult . Of course , these out-of-stocks owe much of their existence to Covid-19 ’ s deleterious effect on distribution and production — including the terrible glass shortage . But concern persists in some parts of the industry that over-farming agave to match consumer demand , coupled with the plant ’ s extensive maturation periods , has damaged the category .
Few people deny that there is an agave shortage currently in Mexico . But is this the byproduct of all that outlined above — or something more natural , and less alarming ?
We recently discussed this issue on an episode of On & Off , our trade podcast covering the on- and off-premise alcohol industry . ( Make sure to subscribe !) Our guest for that episode , discussing tequila trends , was Mike Moreno , owner of Moreno ’ s Liquors in Chicago , a Top 100 Retailer , and the
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