Because of the growing demand for tequila across the globe and its ever-increasing status as a premium liquor, tequila makers are now finding themselves faced with a shortage of the ingredients needed to make the popular drink.
Mexico is the only country in the world that produces tequila, and even within the country there are restrictions on which regions and states are allowed to make it. Tequila is made from a single species of blue agave, and top-shelf tequila is 100% agave, with no fillers.
The problem beginning to present itself within the industry is that the high demand for tequila globally, as well as a growing demand for other agave-related products such as agave syrup and the health supplement inulin, mean that agave plants are in short supply. The competition is getting so tough for farmers there have even been stories of agave thieves who pull up in the middle of the night in pick-up trucks and cart the plants away under cover of darkness.
The price of agave has risen sixfold in the last two years, making it almost impossible for smaller distillers to compete with big names like Jose Cuervo and Don Julio. In addition, many small distillers buy from contract farmers, while big operations grow their own crops, ensuring a steadier supply. The situation has become so bad that growers are harvesting and selling plants that are too young to be used, meaning that even more plants are required to make every liter of tequila. Agave plants are generally harvested at around seven or eight years old, and some farmers are harvesting plants that are as young as four years old, because they are desperate to fill previously contracted orders from distillers.
It’s likely that large distillers will feel the pain of the shortage much more slowly than smaller, boutique distillers with less infrastructure and resources at their disposal. Distilleries that make cheap, blended tequila may also find that their wallets are pinched and that they can no longer offer their tequila at current prices.
It’s believed that the gap between supply and demand will start to close in 2021, when growing initiatives that are being started today will begin to bear fruit. Until then, the fate of many tequila makers is up in the air, a sad price to pay for producing what is fast becoming one of the world’s most popular liquors.
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