A Year of Change: Tracking the (Potential) Tequila Fallout

It’s been documented and talked about in the tequila circles for close to two years now. This is the year that many of the upstart tequilas that have jumped on the tequila bandwagon are supposed to start disappearing (Here’s a great read with some interesting insights and predictions). Tequila’s rise in popularity over the last few years has followed the same basic path as any other popular and successful trend. The public finds a taste for it, it becomes trendy in bars, brands start to make a lot of money and then everyone and their uncle wants to get on the train to a big payday. For some, it’s truly a passion, dream, or part of their family history. For others, it’s simply an investment opportunity or a fun little side venture. Whatever the case, there are roughly 1,300 brands currently registered with the Consejo Regulador del Tequila (the Tequila Regulatory Council), better known as the “CRT” – the governing agency that oversees all aspects of tequila production. Each month, the CRT publishes an updated list of the registered brands to their website. This list is constantly changing as new brands are registered and added, change distilleries, or cease operations entirely. Brands can be removed from the list for a number of different reasons, including human error, so it’s not uncommon to see a brand disappear and then return a month or two later.

2013, in many respects, is the perfect storm for tequila. There has been an agave glut the past few years, driving down prices to levels not seen since the 1960’s. Agave tends to be a very cyclical market, with peaks and valleys roughly on a ten year cycle – about the time it takes to grow a fully mature blue weber agave. Basically, the cycle works like this – prices go up due to demand for agave. Farmers see the prices and turn their fields from annual crops (or previously unfarmed land) into agave. When all of these new fields start to mature 7-10 years later, the market gets saturated and the prices crash, leaving many farmers to let their fields rot because the cost of harvesting is not worth the payday. That creates a shortage a year or two later, increasing demand and prices, and the cycle repeats.

2013 appears to be the end of the current glut and the first year of price recovery. Agave prices are already on the rise. Couple the pending higher prices with industry consolidation, market saturation, marketing costs, and a consumer base that may already be moving on to the next “in” spirit, and the industry is ripe for a shake-up. With this as a background, I’ve added a new page to this site called “Tracking the Brands”. I’ll be using this page to track the brands that are added and removed each month from the industry based on what the CRT publishes, as well as make note of a few brands that raise eyebrows, generate interest (Casamigos), or simply provide a smile (Sparkle Donkey) as they arrive, or depart, the list. Please keep in mind that this is not a perfect science. As noted earlier, it’s common for brands to be removed and then returned to this official list for a variety of reasons. I believe that my tracking is accurate, however, it is certainly not fool-proof. If there are any oddities or descrepencies that you have questions about, please post a comment and I’ll answer to the best of my ability. It will be interesting to me to see how this list changes over the next 12 months. If the predictions come to pass, this list should be much shorter by the end of the year…

Advertisement