How to Survive the Tequila Turmoils of 2018

How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

Whether you’re in the business, a savvy consumer, or just an Average Joe overwhelmed by the hype of agave spirits, how can you ensure that you’ll survive the upcoming tequila turmoils of the rest of this year, and beyond?

We’ll show you how.

But first…

Let’s Review

You’ve heard the news of the current agave crisis that we covered in The Agave Panic of 2018:  Bloodshed on the Streets of Tequila. 

You’ve kept track of the trend since last year when we explained that The Agave Shortage of 2017 is Worse Than We Thought.

If you’re launching agave spirits brands during this time of crisis, we need a short discussion about–

Mega Distributors

Aside from some notable craft brands being swallowed up by corporate distillers, M & A has been the name of the game in the spirits distribution sector, too.

How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

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

This means that smaller agave spirits labels are in danger of never gaining the attention of these behemoth corporations.

And, if your small batch agave distillate has been promised a slot in the hulking distributors’ newly formed “craft spirits division,” specifically to “incubate” promising brands, my advice…

Don’t Do It!  It’s A Trap!

How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

Whether they’ve promised your juice a small amount of attention, or you’re in the “full book” (entire spirits catalog), these divisions are engineered to give the up-and-coming little guy a false sense of hope–and a false sense of security–that your gem will be distributed nationwide, some day.

Fat chance.  It’ll never happen. Wake up!

These mammoth distributors are in bed with the Big Boys, and won’t lift a finger to help you get the word out or build your brand.

Whatever that friend-of-a-friend-who’s-been-in-the-business-a-long-time-and-you’ve-been-golfing-buddies-forever has pledged to you, these departments are engineered to safely “sit” on your precious tequila or mezcal because it has been deemed a threat to the shelf space of their higher paying bread-and-butter flagships.How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

With the recent pay-for-play scandals that have been in the booze news lately, this technique is tougher to detect.

You’ll still be in the same boat you’re in now, doing all the work yourself.

Instead…

Support Your Local Distributor

Not a day goes by where a rising agave star doesn’t ask us for recommendations on a “good distributor” [There’s an oxymoron!] in any state.

Personally, I hesitate to recommend any particular distributor.  I’m not a big fan of them.  Some will argue that the Three Tier System of distribution in the United States is archaic, and serves only the Big Brands.

That said, small-to-mid sized distributors, in my opinion, will become even more important in the grand scheme of things, especially in light of the next impeding mega-merger between Republic National and Breakthru Beverage.

If you’re lucky enough to find hustlers like agave-centric Glass Bottom Distributors in Southern California, or Creospirits in Arizona, your troubles might be fewer.

On the other hand, if you decide to go with a small wine house, or choose a beer distributor or some other arrangement, you’ll still need to instruct their sales staff on how to sell your agave spirit.

Assume that they are simply order takers and woefully under trained (they are!) on anything other than wine or beer, or what’s “on spiff.”

When instructing these salespeople, speak to them in terms they will understand, and don’t have high expectations.

Maybe, just maybe, they won’t disappoint you too much.

Savvy Consumer

You’re one smart cookie.

Not too many people can pull the wool over your eyes, but…

You’re afraid of falling for the excessive marketing that’s endlessly broadcasted to you from all sides of the tequila aisle.

Relax.How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

We suggest you re-read our 2-part series, Craft Tequila:  WTF Does THAT Mean? Part 1.  And, the guidelines put forth in the Craft Tequila Gauntlet in Part 2.

Add Kosher

While you’re at it, add kosher tequila and mezcal to your arsenal, too.

Don’t laugh.  It’s a billion dollar business.

If Rothschild can release a kosher rose champagne, what’s keeping tequilas and mezcals from doing it, too?

Check out our 4 part series, The BIG Business of Kosher Tequila, Part 1 , Part 2 , Part 3 , Part 4 .

The Average Joe

If you’re just an Average Joe, and even if you’ve done all the aforementioned due diligence, you’re still in danger.
How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

Rather than taking shortcuts in order to meet heavy worldwide demand and risk losing quality, some reputable tequila makers have reportedly stopped distilling temporarily in the hopes that agave prices will level out.

[At this writing, agave prices are at $25 pesos per kilo.]

One industry insider confessed to us, however, that a major brand name tequila had switched completely to using diffusers to produce its tequilas.

Asked whether the owner of this large distillery was concerned that the quality of his juice would suffer, he admitted that he didn’t care.

He defended his position by saying that his tequila had been around for so long, and was moving a significant amount of cases, that consumers would never know the difference, anyway.

To purists, news like this breaks their heart.

To savvy consumers, this deliberate disrespect of the public’s intelligence should raise their hackles.

To the Average Joe, this will make your head spin because you make your buying decisions based mostly on tried and true names that you’ve always trusted.

Mainstay brands that were standouts before being bought by global companies, or invested in by foreigners outside of Mexico, are banking that you’ll fall for their marketing–and, on your ignorance.

Don’t let them!

How to Survive the Tequila Turmoils of 2018 https://wp.me/p3u1xi-5zQ

What Else You Can Do

Support small producers of agave spirits.

The Big Boys will always weather the storm, but a few of the little guys could be out of business over the course of the next five years or so.

In promoting them–and even some of the more popular brands, it seems–expect to pay more at your local bar or liquor store.

Whether the agave crisis is fact, fiction or a fusion of both, the scarcity of a commodity will always drive prices higher.

In this thoughtful article by the non-profit advocacy group, Tequila Interchange Project, here’s what else you can do to prepare for what’s to come–without selling out.

Informed agave spirits consumers should always strive to drink for a greater, and more balanced, agave distillates industry.