Tag Archives: 100% agave

Change is at Hand for the Tequila Market, Part I

tequila market, masa azulPart I of II

Written by Chris Zarus of TequilaRack

Tequila Brands and Producers Have Already Sailed Into the Sucker Hole

For those new to the expression, a “sucker hole” is a colloquial term referring to a spate of good weather that “suckers” sailors into leaving port just in time for a storm to resume at full force and wreak havoc on the ship and crew.

For both Tequila Brand Owners and producers of a certain size, their ship has already sailed, and the storm is now closing in on them. Some in denial, others looking through rose-colored margarita glasses, still believe they can navigate through to that glimmer of light on the horizon. However, the perfect storm of doom looms just past the horizon of hope, and will soon envelope and destroy most, if not all, in its wake.

Oh, and that’s the good news. The bad news is that only a few of the big and the very nimble will survive.

This is because of a number of factors, primarily that too many of us bought in to the Yankelovich and similar studies that declared premium and above 100% Agave Tequila brands as the next big thing.

While the premises of these market premonitions were undoubtedly true, too many of us jumped headfirst into the juice just before the world economic decline. Six hundred brands have turned into 1200 brands in less than five years. The growth of the market has been dramatic compared with other distilled spirits, yet, it’s still relatively small, ranked only 4th in US volume. It has not grown fast enough to accommodate all of the entries into the field.

Resistance is Futile – Change is at Hand for the Tequila Market

train wreckThe Gravy Train Wreck Ahead

I’m sure that for many of you, in just reading the title of this article, your blood pressure has escalated, and you may already be misdirecting your anger at the author.

For others who have experienced the many similar economic paths to consolidation in the global beverage industry, you have already accepted that change has to occur, and you will soon better understand and appreciate the math behind what I am about to lay out, and why everything I’m about to outline here will happen in due course.

For those of you who have your personal fortunes riding on the Tequila Train, both prominence and profit may still seem to be so close that you think you can see the light at the end of the tunnel, or beyond the next bend. But, I’m sorry to say that for most of us in the biz, the light at the end of the tunnel is that of an oncoming locomotive. This will be a catastrophic collision, albeit in slow motion, that will drain your resources and your resolve.

iwsrWhat can be learned from the Russians? (Excerpted from JustDrinks.com)

The global economic crisis has had a significant impact on the Russian spirits market, changing market dynamics and briefly halting the much-lauded premiumisation trend, according to current research.

A recently released report from the International Wine and Spirit Research (IWSR) on Russia’s spirits market claims that the downturn has also led to “…disruptions across the supply chain, with many suppliers and distributors going bankrupt or halting production. For healthier companies, however, it has presented an opening to establish their brands and take market share…”

cloud liningThe Silver Tequila Clouds have a very Dark Lining (Excerpted from Global market review of Tequila – forecasts to 2013 www.researchandmarkets.com )

The history of the Tequila industry has been one of boom and bust. Sales rose during the 1940’s only to collapse again in the mid-50’s. Export sales rose steadily from the 1960’s onward, although domestic sales fell sharply in the 1980’s due again to an economic slump, and the severe Mexican economic crisis of the early 1980’s resulted in plummeting sales.

The market was again disrupted by a critical shortage of Agave beginning in the late ’90’s, which served to hold back the category’s international development as brand owners were forced to divert limited supplies to the core US market, and quality perceptions were damaged as some manufacturers moved from 100% to 51% (Mixto) Agave products.

Today, that dynamic is in reverse, and the market is in oversupply. More and more 100% Agave products are coming into the market. This is helping to raise quality perceptions, and in turn, demand is surging not only in core Mexican and US markets but across a number of other countries.

The outlook for the category has rarely been better, and Casa Noble Tequila president and COO David Ravandi commented, “Tequila is entering a stage of consolidation in the world markets. It is no longer a fad. The fact that 100% Agave Tequila exports have increased tremendously over the last two years is extremely positive for the product’s outlook in the years to come.”

US Tequila Importation is a Sucker Bet

tequila history, santa fe“My cousin will make the best Tequila for you Mr. Gringo”

“So, my friend, you want a great Tequila brand? We will make it for you. Just fifty percent cash up front to start the process.”

Unfortunately, far too many have fallen for this old gag. Relying heavily on the forecasting reports of the early 2000’s that suggested that luxury Tequila would be the next big spirits category after vodka.

With dollar signs in their eyes, the believers drank the Tequila Kool-Aid, most of them spending way too much to buy a brand, custom molded bottles, etc. But the worst part was that this left little if any money for marketing. Many did not even understand brand marketing inflation was happening right under their noses.

It had started soon after Patron hit 100,000 cases in volume in 2001, and the cost to market a Tequila brand in the US went from $1 to $10M per year. Today it takes at least $20M per year just to play in the same ballpark as Patron’s $50M plus, Sauza’s $35M plus, and Cuervo’s $30M plus marketing budgets.

Who could have predicted that a “realistic” business plan for the next successful ultra-premium Tequila brand calling for only 10,000 cases in the first year would end in it’s investors taking a bath?

The problem with this equation is three-fold:

1) Pricing: Unlike vodka and white rum, 100% Agave Tequila is just too expensive to produce and bottle in Mexico. Unless, like rum, vodka and mixto Tequila, it is able to be shipped in bulk and bottled near the final consumer, the cost involved with 100% Agave Tequila is always going to be too high to attain critical volume and profit levels.

2) Volume: US mass volumes are best when a spirits category is between $9.99-29.99/750ml. One hundred percent Agave Tequila is currently profitable only at the upper ranges when higher volumes are attained.

3) Distribution: The US “3-Tier” Distribution System is at best an oligopoly, and 19 states run a monopoly. Of the 1200 plus Tequila brands, want to guess how many they want to carry? Well, after the top 20, you are very lucky to be “special order only”. If you are fortunate enough to live in the states of California or Arizona, where one can be both the importer and distributor, you will find yourself driving your precious Tequila brand around to each account in your car.

Without product volumes or market clout, you will be hard pressed to get even an appointment, let alone a vender number with the chain restaurants and grocery stores. These major chain stores like Chili’s, Chevy’s, Costco, Kroger, etc., drive at least 85% of the combined volume in all but the control states. Without access to the chains, your market becomes the handful of privately owned, “Mom & Pop” accounts that usually know that small independent distributors are easy prey for bending the law on consignment, stringing out payments, or not paying at all.

While driving your own brand around certainly makes time for the personal touch and focus, these hand-selling efforts prove to be the most inefficient ways to distribute one Tequila brand. Your glass ceiling to fame and fortune becomes that next level of chain distribution that can only be had by a state-wide delivery system of the large wholesale distributor.

With Tequila segment Pricing, Volume and Distribution all against you, one will need to have a lot more money than the brands of the past in order to simply survive in the US.

Tanks-a-lot for Nothing

Call the tank maker and raise your stocks of liquid now!

no masUnfortunately, most of the mid-sized Tequila distilleries have bought into the notion that Agave prices will go up in the very near future. They base this notion on the boom and bust cycle of the past, and like Lehman Brothers, believe that they have successfully timed the market.

Greedily, many producers are now mortgaged to the hilt in order to produce all the Tequila that they possibly can afford to store in stainless tanks or wooden barrels. Fear of the impending Agave price increase that has yet to happen (and may not for many, many years) has seemingly forced them all into a squirrel-like stockpiling frenzy.

Are they storing Blanco, like acorns, for the hard winter ahead? These stored nuts of liquid demise are in reality winds conspiring to produce the perfect storm for all but the most financially secure and/or nimble producers.

Copyright 2010 International Tasting Group (ITG), All rights reserved. Unless otherwise noted, ITG is the legal copyright holder of the material on our blog and it may not be used, reprinted, or published without our written consent.



U.S. Spirits Market 2008, Gross Revenues by Price Category

http://www.discus.org/pdf/2009IndustryBriefing.pdf (This is the most recent report by DISCUS for 2009. Tequila volume is still listed as 4th.)

http://www.thefreelibrary.com/Spirits+fast+track+brands.-a0144204154 (shows Patrón reaching 119K cases in volume in 2001.)




http://www.oceanfreightusa.com/topic_impg.php?ch=19 (Bonded warehouses.)

http://dsc.discovery.com/news/2009/02/09/tequila-agriculture.html (agave farmers)

http://www.yankelovich.com/ (state of the consumer)


Originally posted October 1, 2010 by Chris Zarus of TequilaRack.  This is considered a standard in the industry and is even more relevant today.

Please visit TequilaRack, a member of the Tequila Aficionado Flight of Sites.



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Tequila Aficionado Media Goes to the Ballpark With Camarena Tequila

Step Up To The Plate

A rarely seen empty front gate at Anaheim Stadium.

A rarely seen empty front gate at Anaheim Stadium.

The invitation read, “Step Up To the Plate With Camarena Tequila.”  The location–Angel Stadium Diamond Club, Anaheim, CA.  The time–Major League Baseball’s Opening Week.  The activities would include a private stadium tour, Camarena Tequila tasting, an interactive tequila cocktail demonstration, and Southwest style bites.

Having grown up about 40 minutes east of Dodger Stadium, and a lifelong Dodger fan, I thought twice about accepting an invitation to the enemy’s camp.  But, the Angels were out of town that week, so I really wouldn’t be cheating on my home team.  And, after all, it was combining two of my favorite subjects…

Baseball and tequila.

Besides, when was the last time the Dodgers ever bought me a margarita?

Batter Up!

I arrived early to Angel’s Stadium and after securing a prime parking spot reserved for Diamond Club ticket holders (wonder how much that costs?), and snapping a few shots of a rarely seen empty front gate, I was escorted to the Diamond Club.

Behind the heavy glass double doors sat the spritely hostess and account manager for Camarena Tequila and their Step Up to the Plate event, Kylie Barnett.  She introduced herself with a firm handshake, handed me my press credentials and pointed me in the direction of the rows of tables formally set out with fresh red and white linens matching the Angels’ team colors.

Press credentials.

Press credentials.

It was an impressive spread with each place setting having all the bar utensils you’d ever need–a shaker, strainer, stirring spoon, muddler, fresh fruits and herbs–to concoct your own cocktails.  And, on every table, were several pairs of Camarena blanco and reposado tequila bottles.

Once I snapped these shots, I was lured by a large patio that overlooked the box seats directly behind home plate.  The baseball diamond itself was just beyond another set of heavy glass double doors.

Rows of tables formally set with Angels' team colors.

Rows of tables formally set with Angels’ team colors.

That’s when the kid in me took over.

Pre-game Stats and Stories

I snapped more shots of the empty field and the seats.  A lone bunting draped across a railing in the upper level stands above me flapped in the off shore breeze.  Like a child reciting the statistics of his favorite player memorized from the back of a bubblegum baseball card, my mind raced through what I remembered of this upstart tequila.

A lone bunting flaps in the offshore breeze at Anaheim Stadium.Camarena was just a rookie in 2010, but made a huge splash as a Big League tequila prospect when it appeared on the streets of Los Angeles in the form of (are you ready for this?) a taco truck!

In those days, liquor sampling was against the law in California.  So, how does a start up brand gain traction in the largest tequila market in the US?

It jumped on the popularity of these guerilla dining establishments on six wheels and dispensed free tacos infused with Camarena tequila from Santa Monica to the Sunset Strip throughout the summer.

The Camarena Tequila Taco Truck appears in Los Angeles.

The Camarena Tequila Taco Truck appears in Los Angeles.

Shrewdly using Facebook and Twitter, it boldly announced when and where the truck would appear.  Usually, the locations were very near where hungry and thirsty patrons could purchase bottles of Camarena tequila.

A brilliant campaign, but later that year Camarena became the breakout brand no one expected.

It signed sponsorship deals with the Chivas USA soccer club, then the Dallas Cowboys, Minnesota Vikings, New York Jets and New Orleans Saints of the NFL.  What seemed like only moments later, it secured partnerships with NBA venues for the Phoenix Suns and the Orlando Magic.

If that wasn’t enough, the following year, it wrapped up agreements with the Chicago White Sox, Colorado Rockies, San Diego Padres, San Francisco Giants, Atlanta Braves, and here at Anaheim Stadium, the home of the Los Angeles Angels of Anaheim.

By design, with the element of surprise, Camarena Tequila had scored agreements in the most visible markets in sports and in the regions where the most tequila is consumed in the US.

Again, a brilliant game plan that lead to Camarena’s triple digit growth in a very short time.

In 2013, Camarena has paired down its sports sponsorships in Major League Baseball to concentrate on solidifying strategic alliances with five clubs.  Two of them, the Atlanta Braves and Colorado Rockies, have dedicated Camarena Tequila themed bars with specialty cocktails and food inside their stadiums.

Some of the invitees to the Step Up to the Plate event had filtered out onto the patio with plates of fresh tacos and ceviche.  That was my cue to get some food before the stadium tour started.

The Designated Hitter

As I wandered back into the Diamond Club, I ran into a bearded and lanky young man who nervously paced back and forth talking to himself and looking at index cards like a batter trying to remember how the opposing team had pitched to him last season.  He was Camarena Tequila’s hired gun for the evening, mixologist Joel Black, who would teach the rest of us how to expertly mix amazing Camarena cocktails.

Joel Black is no ordinary bartender.  This journeyman mixologist not only has over ten years in the Big Leagues under his belt, but he is also a partner in Black LAB Ventures, a mixology catering and consulting firm servicing Southern California’s  top restaurants, bars, brands, and events.  His latest project is the newly opened Tinga in Santa Monica.

The Line Up

While the idea of the taco truck is still fun, there’s nothing like being served fresh shrimp ceviche inside the comfort of the Angel’s Stadium Diamond Club.  Along with white fish, tomato, red onion, avocado, crisp cilantro and freshly cut jalapeños, this called for a sip of Camarena blanco tequila.

Fresh white fish ceviche.Further up the line was a master chef preparing fresh tacos made from carnitas to mahi mahi, served onto handmade tortillas.  Topped off with made-that-day chips and salsa, and another sip of Camarena reposado, and everyone was good to go.

That’s when Kylie announced what was in store for us next.

After an entertaining and enlightening tour of the “Big A” as Anaheim Stadium is affectionately called, where we were taken from the clubhouse to the dugout, to the underground batting cages and even shown the corporate suites (where liquor giant Campari USA owns one, at $250,000 a pop),  Joel Black took the stage back at the Diamond Club to extoll the virtues of one hundred percent agave tequila versus a well known mixto.

The Pitch

Joel did his best to educate the attendees of the Step Up To The Plate event with a short history of the sixth generation Camarena family responsible for its namesake tequila.  The traditional processes (estate grown agave, oven baking, slow fermentation, extra care distillation) and short barrel aging of the reposado that helped in keeping Camarena’s Highland’s tequila flavor profile consistent.

Coupled with the family’s amazing history of agave growing (which predates baseball’s alleged invention by Abner Doubleday in 1839 by a year!) that includes such historic tequila making families as the Orendains and Cuervos, and Camarena’s current success was all but predestined.

Get Into The Game With Camarena Tequila

After Joel Black conducted the blind tasting of Camarena one hundred percent agave tequila against the famed mixto (can you guess who won?), he put us all into the line up as mixologists.

Starting with a simple Silver Paloma, a traditional tequila cocktail made with grapefruit soda, followed by the catchy Camarena Change-Up served in a classy martini glass, to the clean-up hitting Camarena Grand Slam, whose secret ingredients were muddled pineapple, cilantro and jalapeños,  and the entire evening was a hit.

Pros like Joel Black may not be able to teach you how to throw a wicked curveball or a nasty slider, but you will be able to sling some pretty crafty cocktails to your friends at your next party.

My advice is when you get an invitation by Camarena Tequila to Step Up To The Plate, you take that dare and get into the game!

Learn more about Camarena Tequila here…

See more photos of Camarena’s Step Up To The Plate event on Facebook here…

Click here for even more Camarena tequila photos on Facebook.

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Ken Austin and Avion Knock it Out of the Park with Avion Espresso

avion espresso tequila coffee liqueurThe Package

The packaging was promising.  The bottle is a deep, earthy brown-black like those cups of coffee I enjoy every morning.  The lettering was white with gold trim, just enough bling to show they’d taken some pride in this product.

The Open

Alex’s Inspector Clouseau voice kept coming to mind as I broke the seal.  I removed it carefully with that “child at Christmas” sort of anticipation where you don’t dare ask yourself “Will it be what I’ve always wanted?”

You see, my tagline for decades has been, “In my world, coffee and tequila are food groups.”  (In fact, you may just see that meme floating around cyberspace thanks to Mike Morales.)

I’ve been all over the world and tasted every coffee there is.  I know the difference between Robusto and Arabica beans and I’ll be happy to go on at length about how important the grind of a coffee is.  I’ll also slap anyone who dares to present me with a cup of coffee that was blended with chicory.  I don’t drink that frou-frou double-moo-cow-chunk-chunk stuff, either.  Don’t make me go off like Denis Leary about that.

So, you see, I take my coffee very seriously.

avion espresso ken austin lisa pietsch tequila aficionado

The Nose

A spellbinding effect began when I opened the bottle.  The first whiff delivered deep, rich, earthy espresso.  Not coffee–E S P R E S S O.  I’m talking about perfectly roasted beans ground into a fine powder and forced by hot steam to give up their deepest essence.

2013-05-01 20.47.13Though the bottle arrived attended by eight lovely shot glasses emblazoned with the Avion logo, I poured this into a champagne flute to let it breathe.  (The anticipation nearly had me doing the Guinness dance.)

Finally, I could wait no more.

I swirled it in the crystal glass and it’s dark legs made me giddy.

I smelled it to my right, then to my left, and then head on.

The tequila and the espresso were equally matched.  No one overpowered the other.  They both stood strong and full together, but there was something more.  There was just a hint of honey on the nose and the combination of the three was delightfully intriguing.  Just smelling it made my mouth water.

It was like Christmas!  “Do I drink…do I wait…?”

The nose was phenomenal and I didn’t want to break that spell if the flavor didn’t deliver on the promise.

avion espressoLove at First Taste

I finally closed my eyes and took a sip.

The quality of the ingredients and the mix of flavors was exquisite.  It tickled my lips and sparkled on my tongue.  Yes, sparkled.  The Italian espresso was there in full force but the Avion Silver tequila was not letting it steal the show.

The things it did in my mouth!

I’ve had other coffee flavored liqueurs.  I had high hopes for Patron’s XO Café but it was nasty straight and completely ruined my coffee when mixed.  Avion Espresso has taken coffee liqueur from Maxwell House instant straight to the cafés of Europe holding hands with the blue agave fields of Jalisco.

Avion Espresso is THE liqueur for coffee lovers and a spectacular treasure for those of us who love both coffee and tequila.

The Finish

avion tequila ken austinKen Austin, Founder and Chairman, commented on Avion’s addition of a liqueur to its line.

“At first I didn’t want to do it as a tequila purist.  After many months of work at the distillery I was very happy with the results and we released it. It is doing so well along with our 100% Agave products and I can’t thank enough the many people who are supporting our brand and company!”

This attention to detail and high standard of quality is what makes Avion Espresso the new bar for any brand considering making a coffee liqueur.  Honestly, I can’t imagine how it could possibly be done better.

brand of promise avion espresso nominee award tequila aficionadoAvion Espresso is for those who are passionate about coffee.  This isn’t coffee “flavor”.  This is scintillating silver tequila and dark, rich, espresso.  This is the perfect mix of the night before and the morning after, the nightcap you drink as you watch the sunrise together.  This is early morning sex before sleeping all day!

coffee, chocolateRun, don’t walk, to the liquor store for it, or click on this link and order it now.

Avion Espresso is, without a doubt, on the short list for Tequila Aficionado’s 2013 Brands of Promise Awards.

P.S. Dear Ken…If you could work this magic with a chocolate tequila liqueur, I will love you forever.

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