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Source: Guadalajara Reporter - http://www.guadalajarareporter.com/
Tequila goes upscale on both sides of the border
July 9, 2005
While the raw material is still harvested in time-honored tradition, tequila has reached a new plateau in export sales and expectations of up-scale imbibers.
Story by: David Agren
A 750-ml bottle of Don Julio Real Añejo costs 2,934 pesos at the Iberica liquor stores in Guadalajara. Aged five years in white oak casks and bottled in a unique decanter with silver agave accents, the ultra premium tequila “sells very well,” according Yolanda Leon, manager of the Avenida Niños Heroes outlet.
Once a beverage associated with best-not-remembered Mexican holidays, booze-fueled debauchery and nasty hangovers, Jalisco’s best-known export has increasingly moved upscale, finding a spot on the top shelf of liquor cabinets and commanding steep prices from discerning connoisseurs, who often sip ultra premium tequilas like they would a fine Scotch whisky or Bourbon.
“There’s been a change in the way people have been drinking tequila,” said Carolyn O’Grady-Gold, a category manager for the Liquor Control Board of Ontario (LCBO), one of the largest buyers of spirits in the world.
“There’s not really that shoot and suck mentality any longer.”
While industry giants like Jose Cuervo and Sauza have long distilled premium products, their best reservas and reposados received little fanfare until recently, joining a slew of export-only tequilas from craft distillers. The enormous popularity of premium tequila has even drawn celebrities into the business. Van Halen frontman Sammy Hagar launched the Cabo Wabo brand and actor Dan Ackroyd scooped up the Canadian rights to Tequila Patron.
“Tequila is taking advantage of the trend in the spirits industry that people want to drink better,” said David Ozgo, an economist with the Distilled Spirits Council of the United States. Drinking better often means paying more. Top brands sell for prices similar to premium sipping liquors like cognac and scotch. And consumers seem more than willing to spend big on tequila.
In 2004, tequila sales surged by eight percent in the United States, outpacing all other distilled beverages. Retail and licensee tequila sales at the LCBO jumped 15 percent last year. In total, Mexico exported 8.7 million cases of tequila to the United States, a number Ozgo anticipates will get even bigger. “I would expect tequila to easily outpace the industry for the next 10 years,” he said.
Growth in the top end of the tequila market is expected to grow even faster; consumption jumped by a staggering 29 percent in 2004.
Several factors, both intentional and serendipitous, have propelled premium tequilaÕs popularity. According to Bertha Becerra, spokeswoman for the Consejo Regulador del Tequila (CRT), manufacturers began distilling better beverages, investing in new technologies and improving production techniques. Firms also marketed their products more effectively, leveraging of tequila’s appellation of origin distinction, which imbues it with a certain caché -- similar to luxury drinks like cognac and champagne.
The agave crop shortages of the 90s, which sent tequila prices soaring, also inadvertently boosted the premium market. Tequila drinkers demanded better-quality beverages to justify the steep prices. Producers flooded the market with premium brands in response. And for some high rollers, ultra premium tequila has become a status symbol. Yolanda Leon said politicians and businessmen often buy luxury brands like Don Julio to impress colleagues and clients. Foreigners also buy expensive brands exclusive to the Mexican market at Iberica’s airport location as souvenirs.
Some of tequila’s intrinsic qualities also work in its favor. “Tequila as a product is very mixable,” Ozgo explained. “You have premium products that have become popular in mixed drinks.” With the prices of mid-range tequilas falling due to a surplus of agave – tequila’s principle ingredient – Mexico’s famed firewater is competing favorably against longtime cocktail standbys like rum and vodka. Along with the premium tequila, mid-priced products have also grown in popularity.
At the Avenida Mexico outlet of the La Playa liquor store, store manager Antonio Guerrero said 100-percent agave tequilas in the 200-to-300-peso price range sell extremely well. Most mid-range tequilas now boast 100 percent agave -- a quality upgrade brought about by tougher CRT regulations, lower prices for agave and changing consumer tastes. Previously, many distillers diluted their tequilas with cheaper cane alcohol to keep the price low. “The majority (of tequilas) are from 100 percent agave because the people are searching more for quality,” Guerrero said.
What makes tequila worth the price?
Although growing in popularity, no rules govern the production of premium tequila, giving distillers leeway in making a beverage that commands top dollar. Generally though, each producer labels its best reposado and añejo tequilas as premium, while joven and blanco tequilas are sold to the mass market.
Some distillers age their premium tequilas in oak barrels for up to five years. Many also distill their products numerous times, creating tequilas with fewer impurities (one manufacturer claimed this reduced the amount of “hangover inducing methanol.”) And some put their tequilas in fancy packaging. Whether these steps produce a demonstrably better product is open to debate.
Source: Guadalajara Reporter - http://www.guadalajarareporter.com/
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