Originally Published May 11, 2003
Tequila has come under enormous pressure in the past decade and it is not faring well in many sectors.
First, it became a victim of its own popularity. As international – particularly American – drinkers turned to tequila as the new “hip sip,” distillers scrambled to keep up with demand. That demand came at a time when agave production was at a low because prices for the mature plant were equally low. Farmers simply gave up and began to plant more profitable short-term crops like corn and beans.
Second, it came under pressure from a spreading fungus called fusarium, that affected up to a third of all the plants, making them unsuitable for use in tequila. The continuing practice of growing agave from shoots rather than fertilization has sufficiently weakened the blue agave’s gene pool that there is no natural resistance to the fungus.
And third, tequila prices rose in parallel with increasing demand and dropping production. They rose to the point where many tequilas were – ironically – simply too expensive for the average Mexican.
Many distillers reduced production or dropped brands, some closed and even others were forcibly closed by the Tequila Regulatory Council (CRT – www.crt.org.mx) for trying to produce tequila with unapproved agave or other ingredients.
Despite the ups and downs of the industry, by December 2002, there were around 90 distillers listed in the CRT directory, making about 700 different brands. An understanding of NOM numbers certainly helps the consumer determine who is making what and the differences – if any – between labels.
Tequila production in 2002 fell almost 4 % over the numbers for 2001 (in 2001, 146 million liters of mixto were produced, compared to 19.272 million liters of 100% agave tequila). The CRT figures show that the production of mixto tequila dropped 6.74% while 100% tequilas – always a smaller production – rose 9.34%. This shows that distillers are trying to supply a market demanding the pure tequilas, particularly the export market.
Domestic consumption fell too – 6.58% in 2002, no doubt as a result of steeply rising prices. In comparison, exports rose sharply – 16.61% for mixtos and 14.29% for 100% tequilas, an overall increase of 16.4 %. The majority of exports are still to the USA – up 18% in 2002, but the world market is still growing and overall exports increased 16.4% in 2002.
All of this translates into is a crisis on the Mexican homefront. My trip to Zihuatanejo, Guerrero, in February this year showed me that a lot has changed in the market since my previous visit.
First, the number of outlets for tequila had dropped. Several stores were no longer selling tequila or were out of business. I can’t say whether this is a direct result of the market or it reflects the situation in other communities, but it was a disturbing sign something had changed. There may also be increasing pressure in the area from sales from the Comercial, a box store supermarket partially owned by the American giant Wal Mart that opened in Zihua two years ago. It’s bulk sales pitch has affected other small merchants in the region, so it may also play a role in alcohol sales.
Like most box stores in Canada and the USA, the Comercial stocks popular brands like Sauza, Cuervo and Orendain products. They have no interest in being a connoisseur’s shop, but specialize in volume. I noticed most of their stock was mixto, but they did offer some pure tequilas as well, although the variety was limited.
The most notable place where the Comercial had no effect was in the change in brands on the store shelves. Many previously 100% agave tequilas are now merely mixtos. I was surprised by the number of them – two to three dozen of easily recognizable brands and bottles no longer advertised themselves as 100% agave. For the careless consumer, this is a tricky situation. Old favourites like El Jimador are now mixtos.
Another unsettling change was the trend to make numerous “reposado” and “añejo” mixtos. While these are properly aging types, and might be legitimately applied to mixtos, they are more traditionally associated with pure 100% agave tequilas. Again, the consumer has to read the labels closely because it’s easy to pick up a bottle that sells itself as “añejo” without realizing it might be just a mixto!
I also noticed a trend toward fancier bottles. While tequila makers have always had a flair for marketing and produced some of the nicest and most flamboyant bottles around, I was mildly surprised by the increased number of them this year. However, on closer inspection I found that many of the fancy bottles housed mixtos – an obvious attempt by the producers to distract the unwary consumer from the contents by elaborate packaging.
However, the prices of these new mixtos do not reflect the contents: they are generally priced to match 100% agave tequilas. Most of these were at medium-to-high price categories, which means they are basically aimed at the tourist because that puts them well outside the average Mexican’s buying power.
As expected, 100% agave tequila prices were up from 2002. Some, however, had not increased substantially (my favourite, El Tesoro de Don Felipe was about the same, given the peso’s devaluation) and some like Cuervo’s superb añejo Reserva de Familia had actually dropped in price! Others had increased marginally.
You now have to read the labels far more closely to determine what you’re getting.
There seems to be a growing trend towards agave liqueurs. There have always been a few that offered a sweeter tequila-like taste, but this year they came in several flavours, including coffee, strawberry and chocolate. I am not personally drawn to the sweeter liqueurs but it’s a trend worth investigating more on my next trip south.
I noticed that most remaining stores had little mezcal of note, merely the unpalatable, common varieties like Dos Gusanos and Monte Alban. There were no premium mezcals like Del Maguey to be found at all in Zihua, at least in the stores. Even the medium-quality El Famoso was noticeably absent.
However, on a slightly more positive note, the duty-free shops in the airports were better stocked with both 100% agave tequilas and 100% agave mezcals than in previous years. Again, buyers have to pay close attention to the labels because there are simply too many mixtos hiding under fancy packaging to be careless about your purchases.
I did notice many new brands, although few from new distillers. This may simply be a factor of distribution in the area where I travel. There were still many old favourites on the shelves, but several had disappeared since 2002. Again, this might be a local issue. But with producers focused on the export market, there may be little interest in the domestic market for the smaller producers.
Obviously the Mexican market is changing. It’s getting more expensive to buy tequila and the variety seems to be increasing but the profusion of mixtos masquerading as good tequilas has muddied the view for the consumer. We’ll have to see how this emerges next year when I return to Mexico again.