The Agave Panic of 2018: Bloodshed on the Streets of Tequila

Bloodshed

The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mAOn Jan. 22, 2018, a particularly savvy tequila brand owner announced in a private message to this office:

“Agave prices out of control.  $22/kilo.  Industry getting destroyed!”

Coincidentally, earlier that same day, another brand owner/ambassador admitted to us that the current cost had blown up to $24/kilo.

That savvy brand owner then added to his message–

“…but Cuervo started it.  Bought up a ton of [agave] before their IPO.  Increase balance sheet.  That’s, at least, the word on the street.”

But, shit got REAL for Jose Cuervo when…

Cuervo Cries Wolf

In this El Financiero article dated December 21, 2017, Francisco Beckmann Vidal, owner of Tierra de Agaves and Jose Cuervo, warned of a looming agave shortage.  He…

“…urged agave producers to increase plantings because whether in tons or in number of agaves, the industry requires more of your prime material.  Planting must begin now.  Eyes have to be opened and decisions need to be made.  Only the industry can provoke the necessary changes.”

[“…instó a los productores agaveros a que incrementen los plantíos porque tanto en toneladas o en número de agaves la industria cada vez requiere de más de sus materia prima, “hay que empezar a plantar desde ahorita. Hay que abrir los ojos y tomar decisiones. Solamente la industria es la que va a provocar estos cambios que se necesitan hacer.”]

Like Shaggy said–

It wasn’t me!

 Here’s Your Sign

All the signs of an impending shortage were there.  Major spirits distributors, tequila and even mezcal brands jockeyed for position in the Agave Triple Crown race.

In 2015, Diageo, the world’s largest producer of spirits, swapped its Bushmills Irish The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mAwhiskey brand for Don Julio, previously owned by José Cuervo.

After Cuervo’s early February 2017 initial public offering, Davos Brands acquired a controlling interest in Master Sommelier Richard Betts’ Sombra Mezcal and Astral Tequila brands, in March.

Then, in early June 2017, spirits and wine behemoth, Pernod Ricard, purchased a significant stake in founder Ron Cooper’s beloved Del Maguey Single Village Mezcals amid uproar from long time fans claiming “sell out.”

Later that June, in a surprising move, Diageo bought Casamigos tequila, co-founded by celebs George Clooney and Rande Gerber, for up to $1 billion.

All this time, Bacardi, lurking like a shark in the water, in January 2018, bared its jaws and swallowed up Patron for a reported $5.1 billion.

The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mA

Pernod Ricard, in an attempt to get the last word in January 2018, shelled out the big bucks to purchase the remaining 16% of Ken Austin’s Avion tequila that it had invested $100 million in back in 2014.

M & A was the name of the game in the spirits distribution sector, too.

Late November 2017 brought the news that distributor Breakthru Beverage was set to combine with Texas based Republic National Distribution Company to match 2016’s mega-merger of Southern Wine and Spirits with Glazer’s, Inc.

Real, or Fake?

Some skeptics still don’t believe that an agave shortage exists.

Unlike the more seasoned, and–dare I say–older sippers, this may be the first time Millennials and Gen Xers have ever experienced a truly severe Agave Crisis.

Others completely ignore the fact declaring an upcoming tequila boom, instead, instigated by the Big Three named above.

Even in this article in the Spirits Business, Vinexpo, the leading wine and spirits trade show, and IWSR (International Wine & Spirits Research) predict that:

“The fastest-growing spirit category in terms of volume will be Tequila, which is predicted to increase by 118% between 2016 and 2021 to 35m cases.”

Seriously?

 Thank You, Captain Obvious

We told you last year this was coming.The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mA

Weren’t you paying attention?

In the article The Agave Shortage of 2017 Is Worse Than We Thought we outlined the reasons for the then looming crisis.

Still, you bought ALL the tequila and mezcal you could drink, didn’t you?

The Numbers Don’t Lie

According to DISCUS, 17.2 million cases of tequila were sold in 2017.  3.2 million of those cases were in the pricey Super Premium category, alone.

Must have been a good year for some of you.

On the Mexico side of the border, things aren’t so rosy.

Freak Out

According to these articles in Joe  , Telam , and Reuters

“This year [2018], a total of 42 million agave plants were projected to supply 140 registered companies.  However, only 17.7 million of those planted in 2011 are ready to be harvested, the Tequila Regulatory Council and National Tequila Industry Chamber have said.”

That’s assuming producers are using full grown agave.  As explained in the above articles–including our own–2 to 4 year old immature agaves are being sold, as well.

With the use of diffusers by the large producers like Sauza and Bacardi (Cazadores), the age of agave plants used to make tequila is irrelevant.

The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mA

About Those Stolen Agave

For several years, now, growers in Oaxaca had reported that truckloads of stolen (or purchased) espadin used to make mezcal were headed for tequila distilleries in Jalisco.

Now, a reported 15,000 blue agave plants have been hijacked from blue agave growers supplying the Big Boys.  That’s triple the amount reported in 2016.

It is presumed that these pilfered plants were going to los mieleros (Big Pharma) since they pay bigger bucks for blue weber agave.

So, there is some poetic justice during this Agave Crisis.

 The Blame Game

As much as major metropolitan areas would like to believe that they carry this much clout, cities like New York are NOT to blame.

On the other hand, brands like Houston based Pura Vida blames the Big Guys, too.

Austin based Dulce Vida tequila agrees.

And, one more for good measure from this small brand owner via LinkedIn on February 5, 2018:

[“The sad reality for small producers that depend on purchasing ripe agave that results in extraordinary 100% blue agave tequila is that the Large Makers are the ones who have stockpiled huge quantities of premature agave.  But the 4 year old plants don’t yield good tequila.  Moreover, it requires double the amount of prime material [agave] for the production of tequila.  In short, the very same Large Producers have aggravated the problem and devastated the cultivation of blue agave.”]

While we’re pointing fingers, let’s accuse the real culprit of this economic and agricultural mess, shall we?

Greed

In October 2017, we spoke to Master Distiller of G4, Terralta, and Pasote–and agave grower–Felipe Camarena.

Minutes before the VIP Hour of El Cholo’s yearly Tequila Tour began, he briefly outlined to me in simple mathematical terms, how much per kilo he’d require to make a nice, honest living growing agave.

The amount was not unreasonable.  In fact, it was in the single digit range.

By waiting at the last minute, and selling to the highest bidder, Camarena blamed the greed of amateur agave growers for the skyrocketing maguey prices.

How Long?

How long will this agave crisis last?

In January 29, 2018, Master Distiller of Tapatio and Tequila Villa Lobos, Carlos Camarena, gave this gloomy prediction:

What… Me Worry?

The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mA

Not everyone is worried, however.  Pernod isn’t

And neither are George and Rande.  Having pocketed their nearly $1 billion, they’re venturing into mezcal, now.

The Agave Panic of 2018: Bloodshed on the Streets of Tequila https://wp.me/p3u1xi-5mA

Be afraid–

Be VERY afraid!

Margaritas in Ireland

[Editor’s Note:  On this day after 2018’s International Margarita Day festivities, Tequila Jockey, Jim Johnston, shares his fond recollections of margarita making inside Ireland’s renowned Dick Mack’s Pub & Brewhouse, while visiting relatives in 2017.]

No Country for Cocktails

Ireland is not a cocktail country.

Don’t get me wrong, I had several well made drinks during my visit, but, in most pubs you’re going to find a diverse tap and a shelf stocked with whiskey.

Margaritas in Ireland https://wp.me/p3u1xi-5wy

Such was the case at Dick Mack’s Pub & Brewhouse in Dingle, County Kerry, a wonderful coastal town on the far west of Ireland.

Historic Dick Mack’s has been serving up liquid refreshments since 1899.  It has been in the same family and built a reputation as the classic example of an Irish pub.  Besides a pristine tap, a brass fixture, polished daily with the pub’s name engraved on the front, there is a shelf from bar to ceiling full of Irish whiskeys.

In recent years, Dick Mack’s also has been awarded Munster province and Overall Irish whiskey bar of the year for 2014, 2015, and 2016.  The pub also serves a fair amount of Dingle Gin from the distillery up the road.

Margaritas in Ireland https://wp.me/p3u1xi-5wy

I was told that most Americans drink the traditional Guinness draft, one of the light American lagers available, or they choose to taste some whiskeys from the impressive collection.

When I asked if there was any tequila in the house, Finn, grandson of Dick Mack himself, produced a bottle of what I typically keep on hand at home, Jose Cuervo Tradicional Reposado.

Ireland’s Cocktail Culture

What followed was a great discussion about the cocktail culture of Ireland, including the failed attempts of previous spirits brands to promote tequila on the island.  Patron’s The Patronic (Patron tequila, tonic and lime) did not take off here.

Finn’s hope is that the acquisition of Bushmills by Cuervo flagship Proximo in 2014,Margaritas in Ireland https://wp.me/p3u1xi-5wy would lead to a more modern, consumer savvy, tequila-esque promotion of the Irish whiskey label.

As we spoke I noticed a bottle of Cointreau hiding behind some whiskey, as well as some fresh lemon juice and quite a few limes waiting to be sliced.

We were staying with my two cousins in Dingle and it was they who, when they lived in Santa Fe, New Mexico, introduced me to tequila and the simple art of the margarita.

The Simple Art of The Margarita

It was a particularly warm day for Ireland in late May, about 75 degrees.  Perfect for enjoying margaritas.

I offered to give the Irish crew behind the bar a quick lesson in margarita making and they went about putting together the Irish version of the first really good margarita that I had ever had, the House Traditional, at the famed Maria’s New Mexican Kitchen in Santa Fe, where lemon juice is the citrus of choice.

We made margaritas, and the boys behind the bar agreed that they were a far better effort than the last attempt at tequila marketing that they had been exposed to.

Slainte!

Margaritas in Ireland https://wp.me/p3u1xi-5wy

I would venture back to Dick Mack’s several times that week but, knowing that I had a steady stream of tequila to taste when I came home, I stuck to the perfectly poured Guinness and local whiskey.

Who knows?

When I go back to Ireland, I may have a margarita waiting for me.

Slainte!

Patron Survey Finds ‘Regifting’ is Widespread

New Holiday Campaign for Patron Tequila Seeks to ‘Eliminate Regifting’

margarita, vault
From the Tequila Aficionado & TequilaRack Vaults

tequila, LAS VEGAS Nov. 16, 2009 /PRNewswire/ — A recent survey commissioned by The Patron Spirits Company, importers and marketers of ultra-premium Patron tequila, has found that 68 percent of people claim they’ve regifted, or considered regifting, a holiday present.Regifting is defined as the act of taking a gift that has been received and giving it to somebody else, sometimes in the guise of a new gift.

The national poll, conducted among 1,040 adults ages 21+ by Russell Research in late October, also revealed that co-workers are the most common recipients of regifted gifts, followed by family members and service providers (such as mail carriers, home maintenance people, etc.)

Eliminate Regifting With Better Gifts

“People may not always admit it, but regifting is clearly a common practice, especially around the holidays,” says Patron’s brand director, Jennifer Long. “So this holiday season, we decided to tackle this familiar issue head-on by reminding people that if they give the gift of Patron, they can ‘Eliminate Regifting.'”

The Patron “Eliminate Regifting” initiative runs from mid-November through year-end, and includes outdoor advertising in cities across the country, targeted holiday-themed magazine ads, online promotions, and in-store displays (complete with baskets of red bows for consumers to use to adorn their gift purchase). Patron’s holiday efforts also include easy-to-prepare seasonal drink recipe suggestions for at- home entertaining. The recipes use Patron tequilas and Patron XO Cafe coffee and tequila liqueur, and reinforce the high quality and versatility of these ultra-premium spirits.

Patron’s holiday gift-giving survey also asked people what they believe is the most common reason for a person to give a bad gift (those that might end up in the regifting pile). The majority of respondents cited “lack of creativity” as the key reason for giving poor gifts, followed by “procrastination.”

The Perfect Hostess Gift

The poll also found that most adults consider a bottle of top-shelf spirits or wine to be the perfect gift to offer to the host of a holiday party.

“High-quality spirits like Patron are always appreciated gifts,” adds Long.

“Whether for a friend or family member, or for that perfect holiday party or get- together, giving a bottle of ultra-premium Patron tequila always reflects well on both the recipient and the gift-giver.”

Simply Perfect in every way, Patron tequila is an ultra-premium luxury white spirit that’s delicious on the rocks and mixes flawlessly into most any cocktail. From the highest-quality Weber Blue agave plants grown in the highlands of Jalisco, Mexico, to the centuries-old distillation process to the signed, handcrafted glass bottles, Patron is produced with unparalleled attention to detail. Imported and marketed by The Patron Spirits Company, brands in the portfolio consist of Gran Patron Burdeos, Gran Patron Platinum, Patron Silver, Patron Reposado, Patron Anejo, Patron XO Cafe (tequila and coffee liqueur), and Patron Citronge (extra fine orange liqueur), as well as Pyrat Pistol, Pyrat XO Reserve, and Pyrat Cask 1623 Caribbean rums, and Ultimat ultra-premium vodka. For more information, please visit www.patronspirits.com. Or to give a bottle of Patron for the holidays, visit www.patrongift.com.

tequilarack

 

Originally posted November 16, 2009 by TequilaRack.

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

Patron Killing

Charlie Mashni of Depot Nuevo in Chicago discusses his technique for Patron Killing.

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