Tequila has gone upmarket, but the forecast for the future is stormy.
Most Americans have been introduced to tequila via the margarita, currently the number one cocktail in the nation. But tequila has lately become a genuine spirits superstar of its own, with overall sales jumping an impressive 17 percent annually since 1995. But what drove this boom is also its Achilles’ heel: the 100 percent agave wood-aged tequilas may be on their way to becoming more rare, special, and expensive than ever imagined.
Taking note that the prevailing consumer winds of the early 1990s were blowing in the direction of higher-quality libations that offered deeper character and greater sophistication, Mexico’s tequila distillers shifted their focus in marketing and advertising away from the rudimentary mixto bottlings—the unaged tequilas that legally can be composed of 60 percent blue agave and 40 percent sugar distillate—toward the tonier, wood-aged, and more flavorful tequilas distilled from 100 percent agave, such as Jose Cuervo’s high-end brand, 1800.
Simultaneously, many distillers began programs of contract distilling for marketers from north of the Rio Grande who paid to have them create special tequila cuvées, or blends, that were then specially packaged in ornate hand-blown bottles. These high-rent tequilas ($20 or more per bottle) were aggressively targeted at affluent, educated, and professional consumers, people who were willing to pay for a more exotic and singular-tasting product. Thus, where once Cuervo Gold at around $12 a bottle dominated the tequila scorecard, other names, like El Tesoro de Don Felipe, Sauza Hornitos, Chinaco, Patron, and Porfidio, became familiar sightings in fashionable bars and restaurants. Much of the attention was instigated by their price tags, which were sometimes two to three times that of Cuervo Gold.
New 100 percent blue agave brands, such as Don Eduardo, Don Julio, Alcatraz, Don Alejo, XQ, Nacional, and César Monterrey, are at present flooding the marketplace. The upmarket strategy that worked exceedingly well all through the middle to late 1990s now may be working too well.
Rumblings of thunder Tequila’s botanical source is the Agave tequilana Weber, or blue agave. What grapes are to brandy, what grain is to gin and vodka, blue agave plants are to tequila. Indigenous to Mexico, the blue agave is a bulbous plant with tall, razor-sharp appendages. While they resemble cacti, blue agaves are, in truth, members of the amaryllis (lily) family.
Blue agave plants have long grown in the meticulously cultivated fields that surround the town of Tequila in the state of Jalisco. Situated near the city of Guadalajara, Tequila is protected by the spiky peaks of the Sierra Madre Occidental Mountains and sits at the base of an inactive volcano. Two other growing locales renowned for the quality of their blue agave flank Tequila: the elevated fields around the village of Arandas and the bucolic plains near sleepy Amatitan. Areas in a total of five states—Jalisco, Nayarit, Guanajuato, Tamaulipas, and Michoacán—form the official tequila district and provide the arid environment and silicate-based soils the blue agaves need to flourish.
A blue agave plant reaches maturity in six to ten years. By this age, the plant’s broad, frosty blue spikes stretch as high as eight feet. At harvest time, the field workers, referred to as jimadors, strip the plant of its saber-like leaves with broad-bladed poles, called coas. At the core of the mature blue agave rests the pineapple-like heart, called the piña. Reminiscent of artichokes with thyroid problems, piñas normally tip the scales at 60 to 100 pounds. Rare jumbo piñas can weigh in at 125 pounds.
The piña’s juice, the aguamiel (Spanish for “honey water”), is sappy and intensely sweet. Once harvested, the piñas are placed in enormous steam-heated ovens for 24 to 48 hours and then cooled before being shredded and ground or crushed to extract the aguamiel. Fermentation of the honey water, done in vats, takes two to three days. The fermented juice is then distilled twice in old-fashioned, single-batch pot stills. With the second distillation running its course, the stillman captures just the middle of the run for bottling, discarding the inferior “head” and “tail.” The result is a crystal-clear, high-alcohol (68 to 72 percent) distillate. Before being bottled, tequila’s potency is reduced with demineralized water to a palatable strength of 80 proof, or 40 percent alcohol.
According to infamously amorphous Mexican government regulations, which finally are gradually getting stricter, a spirit can only carry the name “Tequila” on the label if it comes specifically from the designated tequila district and is made up of a minimum of 60 percent blue agave (until 1995, the rule called for only 51 percent). The remaining spirit can legally be produced from other varieties of sugar-based distillates. Tequilas that meet government regulations are identified on the label with codes beginning with the letters NOM (Norma Oficial Mexicana de Calidad) and ending with CRT (Consejo Regulador del Tequila, the regulatory commission). For instance, NOM-1110 CRT on the label signifies that that particular tequila was produced at the Orendain de Jalisco distillery (No. 1110), no matter what the brand name.
All tequilas, whether mixto or 100 percent blue agave, need agave plants of the tequilana Weber strain. And today there is a serious shortage of mature blue agave plants within the designated tequila district. Depending on who one speaks with, a plentitude of reasons for the shortfall is cited, from harmful frosts to pests and fungi. The pest/fungus problem reportedly has affected as much as one-fifth of the existing agave fields.
Despite the pregnant speculation, the factors as responsible as anything else for the current agave shortage are the skyrocketing demand for tequila in the U.S., the escalating number of 100 percent blue agave brands, and the lack of preparedness of the tequila industry as a whole.
Because of the shortage, blue agave growers have been raising prices, some as much as 500 percent in the last six months. Those increases are being passed on to consumers, who now pay from 10 percent to 20 percent more for some high-profile tequilas than a year ago. There’s no avoiding the fact that tequila prices across the board are going to rise steadily—at least for the next one to two years and possibly as far out as three to five years. Throw in pests, fungi and predictable frosts, and what is now an annoying price spike could become a potential disaster.
Though it’s late at this juncture, the solution to avoid such crises in the future lies in the development of a long-term strategy between the distillers, the Consejo Regulador del Tequila, and the agave growers. Positive steps, such as utilizing other potential growing districts within the five states and exploring agave cloning, are infinitely preferable to rolling back the required blue agave percentage in mixtos, lowering the harvesting age of agaves or, worst of all, allowing spirits made from agave varieties other than the tequilana Weber to bear the tequila moniker. The coming decade is destined to be a critical period for Mexico’s tequila industry, one that surely will shape the future of tequila.
My parting advice to consumers who like tequila: Buy it now.