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Reprinted with the permission of
Serving industry professionals for over 65 years.
With most spirits the waiting begins once the liquid is in the barrel, as raw spirit slowly develops into Bourbon or Scotch or Cognac. Tequila, however, is an exercise in patience long before distilling ever begins. Blue agave, the succulent plant which forms the foundation of Mexico’s national spirit, takes from eight to twelve years to develop before it can even be harvested and ultimately transformed into this Mexican nectar. Making tequila is, quite literally, like watching grass grow.

Because of this futures guessing game, agave shortages have haunted the industry — from the 1930s when surging American thirst caught the Mexican producers short on supply, to the 1990s, which saw a similar run on premium tequila accompanied by rising prices. But at the moment, tequila is staging the greatest comeback since the Alamo, with a larger, and better, stateside selection than ever before.

Between Margaritas and fine sipping, American aficionados can’t seem to get enough of the southerly spirit. According to Adams Business Media, Americans appear to be drinking both more tequila and better tequila. For 2002 consumption was up 9.1 percent over the previous year with retail sales up 18.1 percent. And again in 2003, consumption and retail sales rose, 6.4 percent and 8.1 percent respectively. And this time around, tequila producers seem prepared to keep our salt-rimmed glasses filled.

Carlos C. Camarena, master distiller and blender for Jim Beam’s El Tesoro brand says the ups and downs of tequila are nothing new. “The agave shortages of the 90s were real, but not new. We have 100 years of this type of situation. It’s difficult when you spend eight to ten years to get some money out of your investment.” Plantings that occurred during the shortage are reaching maturity now and it may mean good times for consumers. “The agave price is coming down fast, very fast. In a couple years it may be almost free,” predicts Camarena. During the greatest shortages of the last decade Camarena estimates that 300-400 brands disappeared and now many are staging a comeback.

Agave is the most important resource for all tequila producers, but not all use it equally. The minimum amount of agave sugars necessary for the spirit to be called tequila is 51 percent. The remainder may be made from cane or other cheaper sugars. In Mexico, and in the industry, these brands are commonly called mixto. The premium tequilas, which command the highest prices and possess the truest agave flavor, are made from 100 percent agave and this statement on the label is a sure sign of quality. Because of the great uncertainty regarding agave prices, El Tesoro has estate fields, which make them impervious to fluctuations and ensures their current 40,000 cases annually.

Another of the handful of artisanal producers is Corazón, acquired by the Sidney Frank portfolio about two years ago. The 100 percent agave Corazón, which offers a range of three marques, is entirely estate grown and bottled as well.

Allied-Domecq’s Sauza also has their own agave sources to sustain their substantial range of fine tequila. “In the past we used to buy much of our agave in the open market. When the whole agave situation hit we were exposed dramatically. Since 1997 we have made a decision to turn that around. We actually own about 80 percent of our requirement,” says Jose Chacon, senior brand manager for Sauza for the U.S. Rather than compromise quality during the shortages, Sauza was content to cease expansion. But, as growth returns to the category as a whole, Sauza is leading the way, with the category up 7.3 percent for the 52 week period ending April 10 and Sauza up 17.8 percent for the same period.

Other 100 percent agaves fueling the sipping trend include Espolon, which is also estate-grown, double distilled and includes a silver, añejo, and a reposado, and Don Eduardo, Brown-Forman’s offering. Don Eduardo offers an Aniversario which is aged eight years in American Bourbon barrels, in addition to their classic line of tequila.

In the category hierarchy, premium products are generally mixto, with the 100 percent agave tequilas priced as super- and ultra-premium. “Premium, specifically gold and blanco, are still the biggest part of the business. They are bringing people back into tequila from rum. A lot of people come in through Margaritas and from premium. Then they might go on to super-premium,” says Chacon.

At the super-premium level, Sauza offers two all-agave options, the number one premium, Sauza Hornitos and Commemorativo, an añejo, or aged variety. Their Tres Generaciones competes among the ultra-premiums. Chacon, in fact, believes the agave shortage may have helped tequila in the long term by educating consumers on the many styles, and the importance of agave and aging for fine tequila.

You may have noticed that 1800 Tequila, distributed by SKYY Spirits, has quietly shed the Cuervo name. In addition, they have greatly improved the quality to be a 100 percent agave product line, making it a true super-premium. According to Bevin Gove, 1800 brand director, “The biggest news from our perspective is the Silver because it is completely new and it is 100 percent agave. And, at the same time, we transformed the reposado to 100 percent agave. Basically, we’re rolling it out now, as we’re depleting the reposado supply over the next month.” The iconic trapezoidal bottle, however, remains the same.

The best news for consumers is that the new all-agave varieties — silver, reposado and añejo — will all be priced around $23.99, 750 ml.

The introduction of 1800 Silver, a blanco style, speaks to tequila’s grand aspirations in the white spirits world. “1800 Silver offers the mixability and versatility component. The silver gives us an opportunity to explore the mixed cocktail arena. It’s interesting because there needs to be a real educational component that goes along with that,” says Gove. For many blanco producers that means on-premise promotion of cocktails in addition to Margaritas, like the Cosmolita, a Cosmopolitan made with blanco tequila in place of vodka.

Bill Bunch, northeast regional sales and marketing manager for the 100 percent agave Patrón from St. Maarten Spirits, agrees that on-premise cocktails are the best inroad for introducing ultra-premium brands to consumers. “The best way to move the brand is with a featured drink — a premium Margarita that is easy to make,” says Bunch, who continues to conduct tequila seminars for interested accounts. “Servers and bartenders are always the first line of offense,” he adds. Patron’s mixto sibling is tequila Mico, bottled in Mexico authenticating it at 51 percent agave.

Several major spirits players have newly acquired brands of premium Tequila. William Grant & Sons is the new U.S. importer for the 100 percent agave brand Milagro. In addition to a premium line, there an ultra-premium Select Barrel Reserve line, which includes an exclusive offering called Romance. This unusual bottle is a great educational tool for novice, or simply indecisive, tequila drinkers as it houses both a reposado and an añejo tequila in a divided bottle.

And Bacardi U.S.A. now markets the 100 percent agave Tequila Cazadores, a 200,000 case brand that is the best selling premium reposado in Mexico and California, two places where they know a little about tequila. With its strong appeal among Mexican-Americans and a nostalgic looking label, Cazadores is positioned to leverage its authenticity and crossover to mainstream Americans.

It appears that this time the American interest and the Mexican supply may all be in line for a border crossing like we’ve never seen before.

Types of Tequila

The two major types of tequila are mixto (made with a minimum of 51 percent agave) and 100 percent. After distillation either of these spirits may ultimately be bottled under one of four classifications.

1. Blanco
Clear in color and offering the freshest agave now. It can be aged for no more than 60 days and only in stainless steel. Many brands use the term blanco, but you may also see the translation silver, or in a case of one-upsmanship, platinum.
Drink it: In a Margarita, or try the 100 percent agave version chilled neat.

2. Reposado
Generally clear. Must be aged in wood for a minimum of two months, just enough time to “rest” and soften the product.
Drink it: In a Margarita or a tequila highball. This is also the traditional sipper with Sangrita, a spicy tomato chaser.

3. Añejo
Often golden or amber in color. Must be aged in wood barrels for a minimum of one year.
Drink it: In a snifter like a sipping Bourbon, especially the all agave versions.

4. Gold
Technically called joven abocado, this is the one classification that is almost always mixto. It is not aged but is treated with coloring and flavoring to mimic añejo and offer smoother or different flavors.
Drink it: As the classic Margarita party mixer and shot tequila.

 
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