Tequila and Mezcal Market Trends

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One of the greatest success stories over the past few years has been the explosion of tequila and mezcal. The market is maturing as consumers are looking for higher quality products with high purity expressions. Tequila and agave-based spirits appeal to diverse consumers. Eight out of 10 bottles of spirits made with agave are tequila, while only two correspond to mezcal. Mexico exports approximately 300 mezcal brands to 72 countries, and the main destinations include the United States, Spain, Canada, Germany, and the Netherlands. 

The flood of celebrity brands has helped fuel record growth in the industry. Mexico, the source of all tequila, last year produced 60 million gallons — 800% more than two decades ago. The boom is visible here, a city where the narrow, cobblestone streets are jammed with tourists, and seemingly every distillery is undergoing an expansion. In the surrounding hills, blue agave, tequila’s main ingredient, is selling for record prices.

 Market drivers:

• Today's well-informed by the easy access to information from any device and demanding consumers know what they want in terms of what they drink, eat or wear. Consumers question the integrity of large, industrialized brands and are seeking more "authentic" and natural products. There is an interesting growth of independent brands with greater transparency to consumers about their origin, raw materials, production processes, sustainability, and social values. This global trend has become very important in the wines and spirits industry. 

• Every day more international consumers are interested in the agave category and are trying different crafted spirits at trendy, small, and famous bars in London, Tokyo, New York, or Berlin. 

• Many brands have been launched but they show a great lack of knowledge of the beverage industry. There is strong neglect of the on-premise execution, and they are only placing the product with retailers through wholesalers. Their lack of consistency is causing them to disappear a few years after their release. Without marketing and working the bars they cannot compete against the big brands. 

Tequila: 

• Tequila production increased 2011-2020 +4.6%CAGR driven by exports (+6.4% CAGR) • Exports now account for 77% of the total Tequila industry • The United States is still the largest Tequila Market with 80% of the total exports

• Total Tequila Production 2020: 41.6 Million cases (40% alc. vol.) 

• The global Tequila market was valued at USD 5489 million in 2019. The market size will reach USD 7746.7 million by the end of 2026, growing at a CAGR of 5.0% during 2021-2026. 

• Ultra Premium category increasing, consumers pay more for better quality. 

Mezcal: 

• Mezcal production CAGR 2011-2019 is +22%.

• Exports have grown +26% during the same period 

• In 2011 there were 68 registered brands exported, in 2019 there were 277 

• The United States is the main market accounting for 71% of the exports 

• There are 6 European countries that represent almost 21% of the total exports 

• Total Mezcal Production 2019: 800,000 cases (45%alc. vol.) 

• The Global Mezcal Market is estimated to be USD 387.10 Mn in 2020 and is expected to reach USD 1.06 Bn by 2025, growing at a CAGR

TRAASA: tequila and mezcal consultants