LAST YEAR, 27.6M CASES OF TEQUILA WERE SOLD GLOBALLY and the category grew by 3% (IWSR). In tequila’s two biggest markets – the US and Mexico – brands proliferate – but the number of producers do not. “The number of tequila brands produced is frankly too numerous to count – there are easily more than 1,000,” says Patrón president and global CEO Dave Wilson. “But, what’s interesting is that there are only about 150 licensed tequila distilleries in Mexico, so simple mathematics will tell you that many of these distilleries are producing multiple brands.”
This is no secret, but even though 150 distilleries in Jalisco collectively produce nearly 1,500 brands, there have been suggestions that the agave shortage means there won’t be enough tequila to meet demand.
But, in the US, Adam Rogers, manager of information services at the Beverage Information Group, says there is little danger of this. “I do believe there is enough tequila to meet the demand even though the blue agave plant takes at least seven years to grow before it can be harvested.” He adds: “If supply is restricted we will see an increase in prices but I believe consumers won’t have any problem finding tequilas, especially taking into account the increasing number of tequilas entering the market. “
El Jimador global brand director Mark Grindstaff says Brown-Forman currently doesn’t see any issues with consumer demand outpacing tequila supplies but concedes projecting category growth is always a balancing act.
Some brands own and manage their own agave fields and this is proving to be more than just a USP. Beam Suntory’s Casa Sauza agave fields stretch over 10,000 acres, with 13 acres dedicated to the agave nursery. Senior director of tequilas Claire Richards is all too aware that supply and demand will always change, especially when working with a natural product. “Agave takes six to eight years to mature so there is always a fluctuation, reinforcing the importance of owning our own agave supply.”
Others have long-term contracts with agave growers in the region, such as Patrón, which is confident this relationship will help it meet demand.
Maybe a shortage isn’t around the corner but the increase in demand is here and it’s being driven by super premium, not mixto, in the US.
Alex Tomlin, vice president of marketing for Diageo’s tequila portfolio, says: “Tequila has had to reinvent itself because of the distinct shift in our drinking culture, from tequila slamming to the sophisticated cocktail scene. What was once a bottom-shelf spirit known for shooting with lime and salt has evolved into something that can be coveted and savoured.”
Grindstaff adds: “In the past, there was a lot of tequila consumed as unbranded Margaritas and shots. The drinks were typically made with a mixto in the bars and often resulted in a less than quality experience for the consumer. As we are seeing in other alcohol beverage segments, consumers are shifting to quality over quantity. They are becoming more curious and as they become more educated about tequila they are willing to pay a premium for brands of the highest quality and reputation.”