As Global Thirst for Tequila Grows, Who Benefits?

Tequila money illustration who profits
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In November, basketball star LeBron James announced his investment in Lobos 1707, a Tequila and mezcal brand. He’s in good company. Dwayne “The Rock” Johnson got his own premium Tequila off the ground last March, while George Clooney sold his Casamigos brand for $1 billion in 2017. And in 2018, an annual festival dedicated to “celebrating the agave and its influence on culture through food, film, music and science” popped up in Marfa, Texas, an artsy desert town that attracts near and far-flung travelers.

Ancient agave spirits produced in Mexico have been enjoyed in the U.S. for decades, especially Tequila. But lately, that popularity is soaring. Tequila was reportedly the fastest growing spirit category among those who sheltered-in-place in the U.S. at the start of quarantine last year.

The global Tequila market is projected to surge to $6.36 billion by the end of 2025. Scotch distillers are importing Tequila barrels to age their whiskies. In 2019, global shipments of mezcal rose 26%, according to the Consejo Regulador del Mezcal.

But how does the global thirst for premium agave spirits, bolstered by celebrity endorsements and consolidation deals, impact Mexican farmers and the country’s agricultural systems?

‘The Keeper of the Land’

Carlos Camarena is a third-generation master distiller at La Alteña Distillery, which produces Tequilas like El Tesoro, Tapatio and Tequila Ocho. He has witnessed the booms and busts of agave farming since he was a boy, when he worked the fields. He went on to study agriculture and is now an agronomist.

Camarena has a deep reverence for the land that he inherited from his ancestors. His family has grown agave and produced Tequila since the late 1800s, and Camarena takes pride in the traditions that prioritize the land and its people as sacred.

agave harvest for tequila mexico
Distiller Carlos Camarena worries that the volatility of the agave market will hit small farmers hardest / Getty

After La Alteña harvests agave from a field, corn and beans are cultivated there for at least three years. This crop rotation adds manure and compost to the land and replenishes its fertility before growers replant agave. The company’s “Bat-Friendly Project” ensures that agave reaches maturity before harvest, too. That way, there’s enough nectar for bats to eat and for cross-pollination to occur, which leads to plant diversity.

“I’m the gardener, or the keeper of the land,” says Camarena. “We try to be very conscious with how we treat the land because we want that land to keep on being productive for the next generation. Everybody should know what kind of Tequila they are getting into their bodies and what the practices and methods are in order to make sure that it’s a product that is good, and not just a product of some marketing campaign.”

His sustainable practices mean no shortcuts for quick profits. Unfortunately, this is now the exception, not the rule, says Camarena.

With the demand for agave spirits growing, big companies rely on farmers to increase production by any means necessary, he says. Farmers are pushed to plant only agave, which means no crop rotation. The soil starts to deteriorate and stamps out genetic diversity. This attracts pests that can destroy agave. It can lead to dependence on chemical fertilizers and pesticides, says Camarena, which has devastating effects on water quality and the people who live in these communities.

Blue agave takes about eight to 10 years to mature. But the bigger players want to get their hands on agaves as early as two years old to meet demand. This degrades the land and creates the sort of Tequila you swore off drinking after a rowdy night and debilitating hangover.

“Terroir is about land. It’s the taste of place, literally.”—Marie Sarita Gaytán, author and associate professor

Right now, Camarena says, there’s an agave shortage that has caused the price to skyrocket. Excited farmers have turned all of their crops into agave. But, in about four or five years, he says, there will be a glut of agave in the market and the price will crash.

“A lot of farmers will not find the markets for their agaves,” says Camarena. “The agaves will rot in the fields, and it will be more expensive for them to try to harvest that agave. They will have to let it die there in the fields.”

This volatility tends to hit small farmers the hardest, while bigger brands and more well-off farmers can survive the bust.

Roots and Restrictions

Since the 1800s, distilleries in Mexico have exported Tequila to the United States. In 1974, Mexico developed a Denomination of Origin (DO) for Tequila. It was supposed to be akin to Europe’s Geographical Indication (GI), a marker that identifies that certain goods have a distinct origin, history and culture.

But some scholars suggest that DOs and other Mexican regulatory institutions safeguard multinational liquor companies. They neglect the traditional producers, farmers, communities and techniques that make the spirit distinct to the country.

“Terroir is about land. It’s the taste of place, literally,” says Marie Sarita Gaytán, author of ¡Tequila! Distilling the Spirit of Mexico and associate professor of sociology and gender studies at the University of Utah. “But it’s also about people. It’s about what people do. It’s about how people live. It’s about what people bring. The knowledge. The generational know-how. It’s about families.”

Wine Enthusiast Podcast: A Wine Lover’s Guide to Mezcal

Like many industries, there’s a long history of gender inequality in the Tequila business, Gaytán says, but the role that women played in mezcal, pulque and other agave distillates is nuanced. She says that within Indigenous cultures, women were acknowledged as consumers.

“Does that translate into equality? I’m not sure,” she says. “But was there recognition? Certainly.”

As Tequila emerged as Mexico’s national drink, it became closely aligned with the nation’s Euro-centric and narrow idea of masculinity, which likely led to mezcal and its producers being overshadowed up until recently, says Gaytán.

“In this new renaissance around the entire conversation around how mezcal is emerging, it’s one of diversity,” she says. “And in the optic of diversity, Indigenous production and women’s roles are elevated in it.”

In 2012, Gaytán coauthored a paper with researcher Ana G. Valenzuela-Zapata that explored how women have been present in agave spirits production for centuries, but their roles have been overlooked or undervalued.

“Some of it is related to how alcohol in general is gendered as masculine in Mexico, but also globally, for the most part,” says Gaytán.

Aerial view agave
Since the 1800s, distilleries in Mexico have exported Tequila to the United States / Getty

There were also racial hierarchies in Mexico. Wealthy hacienda owners of European, usually Spanish, ancestry in the state of Jalisco were able to secure deals, develop bottling and export their agave products out first. But, throughout Mexico, all types of people, including mestizos and Indigenous communities, have distilled agave for centuries, says Gaytán.

“A lot of that came from this standardization [of Tequila] and what Mexican elites think is important and what they want Mexico to be imagined as and it is not Indigenous,” says Gaytán. “And if it is Indigenous, it’s only certain bits and pieces of indigeneity.”

Modern Movements

As international appetites for Tequila shifted in the 1960s, so did Mexican production. To keep up with demand, Tequila producers were permitted to use sugars that weren’t from the blue agave plant. The result was a Tequila offshoot called mixto. This inexpensive blended spirit flooded the U.S. market in the latter half of the 20th century. It’s likely what your parents doused pre-made margarita mixers with at backyard barbecues.

The steady rise in demand from the U.S. was never for high-end Tequila, says Gaytán, but that doesn’t mean traditional farmers didn’t make top-notch agave spirits.

“We’re witnessing a process of many traditions that have existed for centuries outside of the market, in barter economies, or in very limited regional markets, suddenly become global commodities.”— Clayton Szczech, Experience Agave

Other market forces were at work, however. Gaytán says you can’t tell the story of agave farming without understanding what the 1994 North American Free Trade Agreement (NAFTA) did to Mexico.

After NAFTA was enacted, the majority of small farms went bankrupt because the pact erased almost all trade barriers. Mexican farmers had to compete directly with big American agribusiness. Meanwhile, U.S. farmers exported subsidized crops, most commonly corn, to Mexico. This caused the prices of local producers to nosedive. Unemployment and poverty devastated Mexican farmers, many no longer able to earn enough to support themselves and their families.

In the five years after NAFTA took effect, about half a million Mexicans a year migrated to the U.S. It contributed to a 75% rise in the U.S. labor force from Mexico, according to research by Philip Martin, professor emeritus of agricultural and resource economics at University of California, Davis.

“When people migrate out of Jalisco, [it’s often] the people who used to work the land,” says Gaytán. “Remember, local knowledge of pests, local knowledge of dirt, local knowledge of rainfall…all of these people are coming to the United States post-NAFTA.

“Big corporations are like, ‘Now we have this land and we’re growing our agave on our own terms. Now we need labor.’ So, what did they do? They go to their next labor source, which is going down to Chiapas, where they have Indigenous people, or Oaxaca.”

The industry became a “big machine” that prioritized profits and production over workers’ rights, she says.

Why Are There so Many Celebrity Tequila Brands?

In the early 2000s, the boom for premium Tequila started in the United States and Canada. And, over the last decade, mezcal has grown in popularity abroad. Mezcal is made from native agave, mostly found in Oaxaca, where there’s a significant population of Indigenous people.

Gaytán says that the boom has led big multinational companies, which now have a stake in mezcal, to buy land from Indigenous land owners.

“What does it mean to turn Indigenous land holdings, where people were harvesting and sharing land, growing corn, onions, tomatoes and harvesting wheat, then turn everything to agave?” she says. “Think about those effects. Number one, on the earth. But also on people’s diets. When you’re a kid and you grow up and you start seeing agave everywhere, agave is so important. It changes everything.”

As the international market for agave spirits evolves, members of the Tequila community advocate for fair treatment of Mexico’s agricultural heritage and those who uphold it.

“We’re witnessing a process of many traditions that have existed for centuries outside of the market, in barter economies, or in very limited regional markets, suddenly become global commodities,” says Clayton Szczech, founder and tour leader of Experience Agave, a Tequila tourism company.

“The best way to support the Mexican countryside from the U.S. is to actualize trade and immigration policies that are fair and would allow people to work with dignity and living wages on both sides of the border.”

Published on February 12, 2021
Topics: The New Now