Tequila and mezcal, long perceived as unsophisticated spirits, are carving out a foothold in the luxury market, casting their working class, artisanal origins as a strength. Authenticity and roots in local Mexican culture are driving both premiumization and international development for the segment—with large spirits groups making their presence increasingly felt.
Tequila may be familiar to North American consumers, but it remains largely unknown to the rest of the world. Of course, the very word “tequila” calls to mind images of festivities with the spirit hastily consumed in drunken shots or swirled into frozen margaritas. But what do we know about its history and trade secrets? How much do we even know about the agave, the plant from which it is made? With its prickly leaves, the agave is easily mistaken for a member of the cactus family, when it is in fact a species of succulent.
Agave means “admirable” or “illustrious,” as its Greek origin suggests. It flowers once, after many years, just before dying. The Aztecs worshiped the plant, which they used to make a fermented beverage called pulque. Today, agave is used to make tequila and mezcal, two spirits that tend to be seen as very different, although they have the same origin—in fact, mezcal is simply a variety of tequila. There is one important difference between the two spirits, however: mezcal can be made from many varieties of agave, but tequila can only be made from blue agave, which grows in the area surrounding the city of Tequila—from which its botanical name, agave tequilana, is derived.
An investment opportunity for multinationals
Tequila owes its greater reputation to the efforts of a few haciendas that began exporting to the US— including the Jose Cuervo and Sauza families that first exported to the US in the 19th century— and gradually industrialized their techniques. During this period, mezcal makers kept to an artisanal scale and maintained their status as producers of local, workingclass spirits. Today, in Mexico, tequila and mezcal both have their own unique set of regulations and protected designations of origin that indicate the region where they were produced. Tequila production is concentrated in the state of Jalisco and mezcal in the state of Oaxaca. Mexico’s efforts to set guidelines for and recognize its iconic products has generated an explosion in sales over the last several years—a phenomenon that has caught the interest of global players. Although Jose Cuervo, the leading tequila maker, is still owned by the Mexican family-owned group Becle, other leading brands are now flying foreign flags. Don Julio, for example, was bought in 2015 by Diageo, Patrón Spirits was acquired by Bacardi Limited in 2018, and Avión joined French spirits group Pernod Ricard in 2018.
Tequila earned a reputation as a fast-growing product with the memorable launch of the Casamigos brand: created in 2013 by actor George Clooney, Casamigos was sold to Diageo in 2017 for one billion dollars. In March 2020, actor and former wrestler Dwayne “The Rock” Johnson launched Teremana tequila in partnership with the Germa n company Mast-Jägermeister. Teremana’s success, despite the Covid-19 pandemic, confirms that when celebrities pitch tequila as a lifestyle product, brand image gets a boost. In this case, quality takes precedent over quantity to attract new consumers, for brands must overcome tequila’s lingering lowend reputation. As in the entire spirits market, premiumization is underway in this sector. With this in mind, luxury group Moët Hennessy (LVMH) launched its first tequila brand, Volcan de mi Teirra, following a 50/50 joint venture established in 2017 with the Gallardos, a family of Mexican entrepreneurs.
The latest stages in the development of agave spirits now include mezcals, which confer an aura of authenticity and originality. Diageo owns several brands, including Mezcal Unión, which the company added to its portfolio in January 2022. In 2017, Pernod Ricard acquired Del Maguey and its line of mezcals, each one produced in a single village, and in 2020, the company formed a partnership with Ojo de Tigre Mezcal. Large-scale operations are likely to continue in this small but promising market. Mezcal appears to be a clever way to penetrate European markets, where consumption of agave spirits is far lower than in North America. The French are particularly receptive, according to Romain Llobet, French ambassador for the brand Del Maguey since 2014 and co-founder of Bibine Club, a spirits distribution company serving cafés, hotels, and restaurants. “The market has been evolving for the last five years with the tequila category attracting many more players and educating consumers to an unprecedented degree. Mezcal is in high demand in restaurants and cocktail bars, and some offer a dozen references.”
“Like great chefs, bartenders are always on the lookout for new flavors, and they love working with mezcal’s smokey notes. You can use the spirit in all kinds of cocktails or sip it like a good whisky, with or without ice,” adds Georges- Alexandre Congost, International Sales Director at Spirit Brothers. Founded in 2020 by Hugues Pietrini (formerly of Stoli, Moët Hennessy, and Orangina Schweppes), this French spirits brand chose to enter the agave market with its Mahani brand— a mezcal with “only” 40 proof, which is supposedly more accessible to the European palate—and has plans to release more technical, mature tequilas with higher alcohol content in the future.
Agave spirits have several advantages on which to build a reputation. For starters, their production process is every bit as captivating as those used to produce the spirits most familiar to luxury. “When I created the tequila brand Excellia in 2009, I saw an obvious parallel between the world of cognac and the world of tequila. They share numerous techniques: cultivating and harvesting a plant, fermenting the juice, and distilling, then ageing in oak barrels,” says Jean- Sébastien Robicquet, founder of Maison Villevert in Cognac and creator of several spirits, including the French vodka Cîroc, owned by Diageo. “The major difference is that the agave’s lifecycle is much longer than the vine’s.”
Indeed, while grapes are harvested every year, agave usually takes at least seven years to reach full maturity and produce a piña packed with sugar. Mezcal production stills has a very artisanal feel to it: piñas are slowly cooked in a wood-fired stove dug into the earth and their juice is extracted with a millstone, sometimes powered by a horse. It takes a good month and a half to obtain the finished product—that’s time only luxury can afford.
Brands are also drawing attention to tequilas and mezcals that are aged for longer periods of time, known as añejos, aged for at least one year, or extra-añejos, aged for more than 3 years. To describe its new, ultra-premium version of tequila, Volcán de mi Tierra created the designation X.A., meaning “Extra Ages,” a nod to cognac’s XO designation. Inspired by Moët Hennessy’s art of blending, the spirit is based on a unique blend of eaux-de-vie of different ages. The final product is presented in a luminous bottle reserved for a handful of the world’s most prestigious restaurants and nightclubs, since the summer of 2022.
Although not as prevalent as in the world of cognac and whisky, the phenomenon of exceptional limited editions is growing in the agave spirits sector. The third series of Patrón en Lalique is just one example: 14 very old tequilas presented alongside a crystal carafe shaped like an Art Déco agave. Clase Azul Mexico, a 100%-Mexican brand, has long cultivated the concept of luxury tequila; the company chose to present its spirits in a decanter with a curious shape inspired by a chair leg. The bottles, usually ceramic, feature a variety of decorations.
“Each of our decanters takes nearly two weeks to make, and they are all handmade by our in-house team of Mexican craftspeople. Our founder is committed to promoting Mexico through products that keep Mexican art alive,” remarks José Martinez, Director of Communication for the brand. In the US, some of the company’s iconic products sell for $2,000 or more, and limited editions can fetch up to $5,000.
Terroir, craftsmanship, history, knowledge-sharing: tequila and mezcal brands are well aware that there is something to be gained from highlighting the values associated with an object of national pride. On the occasion of its 80th anniversary in 2022, Don Diego launched a vast communication campaign in several countries that celebrates the cultural vitality of the country by showcasing 80 Mexican natives demonstrating their talents.
As we’ve seen, tribute is often paid via packaging. The labels on Mahani mezcal’s locally handblown bottles use the image of a totem animal to celebrate Oaxaca’s Zapotec culture. And Spirit Brothers is uniting tradition and innovation for its new tequila, Celosa. Riding the wave of rosé spirits, this blanco is aged for 21 days in Mexican red wine barrels and presented in a glass bottle with a piña-shaped base and a polished marble stopper handcrafted in Mexico.
This rich heritage is vulnerable to all manner of imitation. In Mexico, certification is expensive for small farmers, so some agave spirits are made just like tequila or mezcal, but do not benefit from official designations. Other Mexican spirits, such as bacanora or sotol, can be easily confused with mezcal or tequila. And agave spirits exist outside of Mexico in other places where the plant grows, such as South Africa. Finally, all sorts of more or less reputable tequila-flavored mixes abound. Such is the price of success.
This article first appeared in the Fall 2022 issue of Formes de Luxe magazine.