Pure vodka, aged rum, single malt scotch and... 100% agave tequila. Every spirits category has at least one characteristic which is considered more premium, and there are trends pushing the popularity of 100% agave tequilas in Europe – but at what cost to the supply of agave? And does an agave-rich tequila guarantee quality or are consumers overpaying for marketing?

The term ‘100% agave’ is now pop- ping up on bottles of tequila across Europe. This relatively new demand from consumers is putting added pressure on its resource. Blue agave, an incredibly complex plant, is the basis of the entire tequila industry and it is only harvested once every six to nine years. This means supply and demand for the plant fluctuates over time and, right now, demand is heavily outweighing supply.

In 2016, the Consejo Regulador del Tequila reported that the industry produced 273.3m litres of tequila, with more than half of this being 100% agave. Sixty per cent of 100% agave was exported.

When supply outstrips demand, producers are able to hand-pick the best to guarantee consistent tequilas at a lower price point. But when the reverse hap- pens, as it is right now in the Jalisco region, the high demand means the price of the raw material goes up and the consistency and price points of brands may waver.

Back in the ’60s, regular tequilas, or ‘mixtos’, were introduced as a cheap alternative to the 100% agave version and they proved popular via the salt, lime and shot ‘tradition’. Regular tequila only needs to be 51% agave and 49% other sugars, which meant producers could create a more consistent product at a lower price.

PAYING THE PRICE

Tequila ambassador Tomas Estes tells DI that, at the time of interview, the price of agave is 20 pesos/kg and it’s believed that by June next year it will be up to 26 pesos.

“Right now the price of agave for tequila is skyrocketing and the demand for tequila is going up.

“The price is moving up weekly. This makes it really hard for small producers, and I heard that some big brands are buying agaves at three to four years old because it’s cheaper and they aren’t necessarily looking for flavour.”

Estes believes the shortage will likely last another three or four years and that agave syrup is reportedly taking up 30% of the demand. This is new com- petition for tequila producers.

“There are rumours that some producers are adding grain-based non- agave alcohol, which is a scandal and against the rules.”

If this is true, then it may be di cult to trust certain 100% agave brands during a time of agave shortage.

FRIENDLY FARMING

Francisco Alcaraz – legendary master distiller at Patrón – expresses the importance of positive relationships with agave producers.

“The number of 100% agave tequilas has almost reached that of mixtos, so the demand for agave is getting much bigger,” he says.

“The cost of producing Patrón is increasing but we’re never going to buy inferior agave. First quality, then the price.”

“We don’t own our own agave fields. We contract with growers throughout the region because agave growers are good at growing agave, and tequila producers are good at producing tequila.

“So, we have long-term agreements with the growers that if the price of the plant increases we will pay that price, and if the value decreases, we still pay a pre-agreed price. This way the agave growers will never lose money working for Patrón and they’re very loyal.”

Larger brands such as Patrón are able to adapt to the agave market more than smaller producers, who will either need to pull production until another affordable harvest takes place, raise their price point, or make regular tequila if they want to survive without breaking the rules.

100% QUALITY?

Despite being the brains behind one of the most internationally recognised 100% agave tequila brands, Don

 Julio master distiller Enrique de Colsa does not dismiss the regular category.

“It’s important to understand what quality is,” he says. “Yes, it’s a great thing to be 100% but there are some very good tequilas which are not 100% agave.

“There are tequilas with 49% and 51% which are very well done and they are much better than bad 100% tequilas.

“But, of course, the best 100% is going to be nicer than the 49%-51%. Just having 100% is no guarantee of quality.”

This means that consumers, especially in Europe where education about tequila is still lacking, could be paying extra for a product which is not up to standard.

“I absolutely agree with that 100%,” says Estes, apologising for the pun. “There are many 100% agave tequilas which are not respectfully made. They don’t respect the agave, they don’t respect the process of making it by adding chemicals and they don’t respect us as consumers.

“As an example [of how a regular tequila can taste better than 100% agave], I was in a bar called La Capilla in Tequila town and its house pour is a well-crafted regular tequila. I call it regular because the tequila industry doesn’t like to use the word mixtos.”

TERROIR

There are two trends currently driving the popularity of premium tequilas in Europe and ultimately putting pressure on supplies.

Estes and his son, Jesse, sell their Ocho tequila in Europe and Tomas is a firm believer in the effects of terroir on the spirit. “Terroir is something that is new for spirits and we’re having a lot of fun with it,” he says.

“We don’t really know what it is about the natural influences such as soil, sun and heat that creates various flavour profiles and differences but it definitely does.”

Estes says that the more stress put on the agave and the less habitable the terrain is, the more characterful the flavours are. The agave used for Estes’ Ocho are grown in the highlands where it isn’t as hot and the plants struggle more – essentially they are being bullied to get more flavour.

“Jesse and I have been spreading this message in Europe for the past eight or nine years and it is received by the French wonderfully. Those who have an understanding of terroir and wine are o en very interested.”

Aside from grape-based spirits, tequila is one of the few where terroir can effect the taste of the resulting spirit. It would be no surprise, therefore to start seeing more brands advertising how they grow their agave, where they grow it and how they harvest it. This is bound to excite the Bordeaux experts and curious Europeans, especially if the word ‘vintage’ starts appearing on bottles.

This level of appreciation for tequila may put more pressure on agave producers, but contrary to that the sipping culture may reduce consumption.

The current trend for premium tequilas in Europe is cocktails, which are still being pushed by some of the top brands, once again putting pressure on the agave producers.

Many of the top premium tequila brands attended London Cocktail Week, where Patrón hosted its Patrón Cocktail Lab to help educate consumers and trade on using its premium spirit in cocktails. The brand also conducts its annual Patrón Perfectionists Cocktail Competition, which aims at creating a 'simply perfect' cocktail and demonstrating international flavours using its 100% agave tequila.

Don Julio’s De Colsa is also a big fan of tequila cocktails. “In Mexico 40 or 50 years ago no one was mixing tequilas, but with the cocktail culture we are growing. Tequila was created for that. In our range we have Blanco right through to Extra Anejo, so we’re the category for mixing.

“In my home I have a very large bar and I love making my own cocktails. I created a cocktail at home five years ago called Condemned, using tequila anejo, gin, peach, orange juice and lime.”

With the demand for and price of agave increasing, possibly for the next year at least, the quality of smaller 100% agave tequila could be under threat – along with its reputation.

Although it is unlikely, this could be an opportunity for well-produced regular tequilas to regain some of their market share if producers can regulate their agave supply and remain consistent.