Tequila Market Booming, But Agave Supply Problems May Interfere

October 11, 2018 - 5:16 pm

MEXICO CITY (WCBS 880) -- The tequila market is booming, but will it last?

As Bloomberg reporter Daniela Guzman told WCBS 880’s Pat Farnack Thursday, there are concerns that it might not.

Tequila has grown worldwide in popularity, and the U.S. is the top importer of tequila in the world, Guzman said.

“We import 171 million liters per year as of last year. But despite that popularity and the global demand, it’s getting harder for the industry, and that’s partly because of the long harvest cycle for agave,” she said. “It takes about seven years to grow the plant, so it really takes a long-term investment from anyone looking to get into the industry either on the grower’s side or from the producer’s side.”

The price of agave has soared to historic heights in the last two years as demand for tequila is booming. One might conclude that would be good news for growers, but it’s not.

“Actually, it’s becoming very hard for them to survive in a volatile market like this. In 2011, there were about 3,000 agave producers in Mexico according to the committee on regulation in tequila, and just last year, there were 1,946, so we do see a lot of people sort of exiting the market and looking to crops that are a little bit more stable than this, and that’s really creating a problem for tequila producers,” Guzman said.

Tequila producers are having a harder time finding agave, and as a result, quality is going down.

“It may be something that’s negative for all of us who love to go to our local bar and drink our tequila shots or tequila cocktails. But really, agave producers are the ones that are in danger of extinction,” Guzman said.

Guzman said a decline in quality is a greater concern than a shortage of tequila.

“One of my sources actually said that some of the agave growers are pulling up the plants prematurely, so instead of waiting seven years to harvest the plants, they’ll, you know, wait three or four years, and that type of tequila has a different type of taste quality,” Guzman said. “So that’s the major concern, and really, here in Mexico, tequila is such a cultural aspect that it would be a such a shame for this industry to really go bust in this boom.”