NEWPORT BEACH, California, June 30TH 2015 – Eighty seven consumer spirit enthusiasts gathered at the waterfront Balboa Bay Resort on May 31, 2015 to participate in the 7th annual consumer based spirits competition. The 2015 SIP Awards comprised of 423 brands from all over the globe competing for rank at the impartial mercy of consumer based blind-tasting.
The 2015 SIP Awards was a battle among the elite in each of the world’s most popular Spirit categories. Each chilled, undiluted sample was presented to Judges in NEAT glasses, scientifically engineered to deliver an enhanced consistent tasting experience.
Tequilas, Gins, Rums, Whiskeys, Cognacs, Vodkas and Liqueurs were some of the participating spirits this year, each graded on Aroma, Taste, and Finish.
The 2015 top rated brands included these agave spirits:
Staying true to the commitment to provide the most reliable measure of international beverage quality ratings, every year’s Judges are every-day spirit consumers and extensively screened to ensure no affiliation with marketing, wholesalers or distributors tied to the spirits industry. “People deserve the highest quality spirits at their fingertips. I want to level the playing field by stripping away the hype to provide quality brands a fair platform on which to compete.” Says Paul Hashemi, founder of SIP Awards.
Awards include Bronze, Silver, Gold, Platinum and Best of Class for each category. The newest award introduced in 2014, is the Consumers’ Choice Award, which honors a brand’s unwavering commitment to their Legacy, Craft and to the ever important Consumer Palate, by placing in the SIP Awards two or more consecutive years.
The SIP Awards has experienced exponential growth within each of its 15 beverage categories. The increasing number of participating brands reflects SIP’s ability to provide spirit makers a valuable, unbiased and exciting opportunity to distinguish themselves in the industry. It has also shined light on the obvious need in the marketplace for its honest arbitration.
About SIP Awards
Catering to the opinions and palates of the discerning public, the SIP Awards present a unique, spirit judging competition, unaffected by industry bias. This pragmatic and refreshing model of evaluation provides an honest stage for feedback and recognition where top brands showcase their achievements. To learn more about the SIP Awards beverage competition, venue partnerships, or for a complete list of 2015 winners, visit www.SIPAwards.com.
On the wall of The Pastry War, a world renowned mezcalería and restaurant in the heart of Houston, TX, this chalkboard message proudly explains why owners, outspoken agave advocates Bobby Heugel and Alba Huerta, staunchly refuse to serve tequilas and mezcals produced with a diffuser.
In their view, it’s a battle between traditional methods of tequila [and mezcal] production which yields “delicious tequila [or mezcal],” versus more cost-conscious methods adopted by distilleries that produce “a shitty version of tequila [or mezcal].”
Let’s look more closely at this cursed contraption.
Using only hot water and sulfuric acid to extract up to 98%-99% of the sugars from raw, uncooked agave, the resultant tequila, as described by noted agave lover, Fortaleza tequila brand ambassador and blogger, Khyrs Maxwell, in his detailed instructional post, There May Be Too Much Agave in Your Tequila or Mezcal tastes like…
“…what I would consider to have a chemical/medicinal taste–sometimes slight, sometimes overbearing flavor profile that always seems to overshadow the beauty of the agave.”
He further states that it “tastes very much like vodka” and has coined the term “AgaVodka.”
“So if you come across a tequila or mezcal made with a difusor, the only way that there can be “notes of cooked agave” is by adding that flavor during the finishing process. They can add “notes of cooked agave?” Why, yes. Yes they can…I’ve seen and smelled the additive. It does exist.”
Maxwell’s statement above excludes the use of authorized additives to blanco (unaged) tequila, of course.
As of December 2012, such practices have been outlawed by the CRT in its normas (rules and regulations governing the production of tequila). It remains to be seen how well it will be enforced, however, so your pricey, Fruit Loop scented blanco may still be safe for a year or two until inventories are depleted.
Spanish diffuser manufacturer, Tomsa Destil, offers a closer look at the mega-masher and its process, which seem to go hand-in-hand with column distillation.
The site mentions that they have installed 12 diffusers for use in agave processing, but makes no mention of their clients, nor if sulfuric acid to extract sugars from agave is also needed.
While controversy swirls around the use of a diffuser, most educated tequila aficionados understand that it is not illegal to do so. In fact, its application was accepted by the CRT some time ago.
As we mentioned in item #5 of our Craft Tequila Gauntlet, diffuser use by a distillery is a closely guarded secret even though it is a fairly large piece of machinery to try to hide. There is a stigma attached to it, with most distilleries that have one completely denying that any of their star brands are processed with it.
While most of the Tequila Industry’s heavy hitters are known to possess diffusers, many also own regular shredders, autoclaves and even stone ovens. Ask any major brand owner whose tequila is produced at these maquiladoras (large production facilities that churn out juice for contracted brands) whether they are a by-product of a diffuser, and they vehemently deny it.
The historic tequila maker initially implemented the super shredder during the last great agave crisis of the late 90s. Years later, it was taken to task by an organized group of key concerned mixologists and tequila supporters who refused to use Herradura in their cocktails or to include it in their bar menus due to a drastic change in its original flavor profile and quality. Herradura finally succumbed and stopped using it for that label.
In the following screen captures of a Twitter chat from May 1, 2014, Ruben Aceves, Casa Herradura’s Director of International Brand Development, admits that the diffuser is now only used for their Antiguo, El Jimador, and Pepe Lopez brands.
Destilería Leyros, producers of their flagship brand, Tequila Don Fermin and many others, bills itself as a model for modern and efficient tequila making.
It was proudly represented that way even in the wildly popular Spanish language telenovelaDestilando Amor, where it stood in for the then fictional Destilería Montalvo.
Enrique Legorreta Carranco, one of the owners of Leyros, agreed to answer some of our questions and to try to help dispel the myths and mysteries surrounding the diffuser.
“I am aware about the controversy of using difusor [Spanish spelling] in the tequila process. Here are some key factors and benefits of the process in order to be firm with the press:
“In fact, there is nothing to hide and we are willing to receive tequila bloggers, media or people from Tequila Aficionado in order to know first hand this innovative and ecological process.”
“The difusor extracts the agave juice first of all, followed by the cooking of the agave juice to extract the agave sugars. This cooked agave juice is called the agua miel. In traditional process they first cooked the agave followed by the agave juice extraction. We obviously need to cook the agave juice in order to get its sugars in order to be able to be fermentated (biological process where sugar turns into alcohol).”
[We’ll note that Sr. Legorreta took issue with the portrayal of the tastes and essences of tequilas produced with a diffuser as described by some bloggers, believing them to be too subjective.]
“This process gives to the taster a more herbal, clean and citric experience. Also this process is more efficient and as a result gives a tequila with better standards in methanol, aldehydes and other compounds not desired because at high levels produces hangovers.”
Traditional Process vs. Modern Technology
“We respect a lot [the] traditional process. The only thing we believe is that the consumer has the last word to choose between one tequila flavor from another.
“There are people that prefer the traditional strong flavor from tequila. Other people are preferring tequilas [that are] more pure, citric with subtle notes of fresh agave like if you are smelling [the] agave and [the] land.”
Reiterating what was demonstrated in the videos above, Sr. Legorreta explains…
“A difusor process uses less than 50% of energy, and less than 60% of water used in traditional processes to produce same quantities of liters. Additional to this [at the] Leyros Distillery we recycle the bagasse that we get in the last phase of the difusor. All this with our completely self-sufficient green boiler is fueled with bagasse from our own mill.”
About That Stigma…
“About why many distilleries denied they have a difusor, I can guess without knowing a reason from first hand–that is because traditional process with ovens sounds more romantic than the technology of a difusor.”
“In fact, a lot of distilleries focus their marketing efforts around traditional processes. I guess this is working. If not, I [suppose] they would be focusing more in the tasting notes of the final product.”
Indeed, Destilería Leyros’ website and videos play on the romance using a smattering of phrases as, “It tastes like countryside, like fire in your blood,” and “Like a passionate kiss, the Taste of Mexico.”
A New Style
In much the same manner as importers, brand owners, and maestro tequileros defend
(and advertise in their marketing materials!) the use of additives in their aged tequilas (“finished and polished”), Sr. Legorreta asserts that juice made with a diffuser is simply another style of tequila.
“The essence of tequila is the agave, and both processes distill agave, just in different ways. There are some people that love traditions [and] there are others that like to innovate and improve things.”
Just as Leyros’ website and videos “invites you to taste and compare, and then let your palate decide which tequila you’d rather raise in a toast,” Sr. Legorreta concludes:
“At the end of the day, or the end of the history, [it] is the consumer [who] chooses their tequila without a bias in the information.”
Some Truths to Consider
The Leyros videos above claim to use machinery as a way to “considerably reduce the risk of injury” to the people on their workforce. Yet, as Maxwell points out…
“Not only is the difusor a way to pump out product, it also uses a very small labor force. As more distilleries use the difusor, there will be less jobs available to those, who for hundreds of years, have built towns and created families by working in the agave distillate industry. So what happens to the unemployed? …do they leave for the US to become illegal immigrants? Or do they work for the narcos?”
At the risk of being redundant, it bears repeating what noted agave ethno-botanist, Ana Valenzuela said about the diffuser here…
“…to prohibit the use of diffusers (in hydrolysis of agave juices) that takes the “soul” (the flavor of baked agave) out of our native distillates, singular in the world for its complexities of aromas and flavors.”
In conclusion, if current figures are correct, exports of tequila rose 16% to US$568 million in the first six months of 2014, compared to the same period last year. It is expected that China will import 10 million liters of tequila in the next 5 years.
Where will Mexico find enough agave to serve their thirsty customers?
These guys know where.
Turning A Blind Eye
On September 4, 2014, dozens of mezcaleros (mezcal producers) dumped 200 liters of mezcal onto the streets of Oaxaca City in protest for their government’s lack of support against tequileros from Jalisco who are allegedly raiding tons of espadín and other maguey (agave), the prime ingredient in mezcal, to produce tequila.
In the process, say Maestros del Mezcal Tradiciónal del Estado de Oaxaca (a trade association) 15 of the 32 varieties of maguey native to Oaxaca are in danger of becoming extinct.
Thanks to these transnational maguey marauders, the burgeoning mezcal industry’s days are numbered, it seems.
If indeed a diffuser strips away the agave’s regional characteristics leaving behind a more citric, vodka-like, cookie cutter flavor profile that easily lends itself to clandestine adulteration, over distillation and multiple barrel blendings, then what’s to keep these pirate tequileros from pilfering agave from outside the requisite growing states and using a diffuser to crank out “tequila?”
These days, filling orders to emerging world markets is more important than the blatant disregard for the Denomination of Origin.
A thought provoking question was asked via Twitter about the use of diffusors in tequila production.
For the uninitiated, diffusors are used to efficiently extract the starches from harvested agave piñas that are subsequently cooked and distilled to make mass produced tequila. To purists, its use is blasphemy because it strips the tequila of character and results in something akin to vodka.
Furthermore, its use is usually kept under wraps by those distilleries who would prefer to let their marketing departments lead you to believe that they still produce tequila the “old fashioned way” without shortcuts.
Case in point is this following Twitter conversation:
Click on any of the links within the Twitter stream to follow, favorite, retweet, quote or respond.
More Questions Than Answers
Now, not only are we left to wonder who’s zooming who on whether or not Herradura uses a diffusor, but we feel the need to question the reasons for using a diffusor, who has been known to use it in the past and who may still be using it to eek out the most juice from their agave.
Follow the link below to one of the most thorough crash courses on tequila diffusor technology.
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
The 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.
What 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…”
The 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
“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!
Unfortunately, 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.
“The World Health Organization (WHO) has shocked the duty-free industry by proposing a global ban on duty-free liquor sales, a business which was worth $6.3bn last year.”
The proposal to slow down alcohol consumption was actually published in December of last year, but will finally get onto the WHO’s Executive Board agenda between January 18-23, 2010. The Board is made up of health ministers from 34 leading countries, and if it approves the proposal, it will be presented to the WHO’s full annual General Assembly in May 2010.
Keith Spinks, secretary general of the European Travel Retail Council (ETRC) believes that the proposal will pass the Executive Board and into the General Assembly that is made up of 193 governments, and warns, “If this goes though, it will be a disaster for the industry.”
Should the World Health Organization ratify this proposal, there is an upside. According to Spinks, this proposal on liquor would not be “binding.”
“It is going to be up to each member country to decide whether to implement the proposal or not.” But, he adds, “My fear is that some countries will and some won’t, leaving us in a big mess.”
In 2005, the WHO tried to ban duty-free tobacco sales through its Framework Convention on Tobacco Control (FCTC). The FCTC was ratified by 165 countries worldwide, but has yet to be implemented by any country.
A quick review of the members of the World Health Organization may give a clue as to why.
Alcohol, Tobacco, and Tourism
All countries which are Members of the United Nations may become members of World Health Organization by accepting its Constitution. So, which countries are members?
Australia, the Bahamas, Costa Rica, Dominican Republic, Egypt, Finland, Germany, Hungary, Italy, Mexico, Switzerland, UK, and the USA, to name just a few. Most all of these countries have one or more international airports with duty free stores selling among other things, spirits, cigars, and cigarettes.
Not only do most of these member countries tout tourism as a major industry, but many also have their signature spirits (and cigars, in some cases) that define them. Examples are rum from Barbados, limoncello from Italy, and of course, tequila from Mexico.
Where duty free merchants pay inventory/business or other taxes, customers usually pay none. For these countries, tourism, and the profit made at duty free shops from alcohol and tobacco sales, is directly related to each other.
How much damage could the enforcement of this proposal do?
WHO vs. Patrón
As stated above, duty-free liquor sales from last year amounted to $6.3 billion in 2008. That accounted for 17.2% of the total global liquor business according to the Drinks International article.
In the April 2008 issue of Impact Magazine, it states that Patrón tequila was also penetrating the travel retail sector overseas, long a key channel for high-end spirits but one in which tequila was underappreciated. Patrón was aggressively growing its brand by sampling at very visible public relations events in key cities such as London, Athens, Hong Kong, Singapore and Sydney, all whose countries are members of the World Health Organization.
The Patrón Spirits Company, producers of Patrón tequila, claim on their website to be in over 100 countries and islands worldwide. Given that there are only 193 members of the WHO, the chances are good that Patrón is available in the duty free stores of most of these member countries.
Assuming that the same 163 countries that ratified the duty free tobacco ban in 2005 also decided to ratify—and enforce–the duty free alcohol ban, the results could be devastating not just for Patrón, but also for Sauza, Brown-Forman (El Jimador brand), and Jose Cuervo, as well as all spirits suppliers, duty free retailers, and airports.
While it seems likely that the World Health Organization’s Executive Board will ratify the alcohol ban proposal, it seems unlikely that any countries will actually enforce it.