Shubham Ualawalker, a 24-year-old bartender at a London bar, can’t pour tequila fast enough to satisfy customers’ appetite for the drink, Reuters writes.

• “We definitely run out of stock every weekend,” says Shubham Walawalker.

Demand for tequila exploded in Europe

Demand for tequila, a spirit made from the juice of the agave plant grown in parts of Mexico, has exploded in Europe. Exports to Spain rose by 90% last year, France by 73%, the UK by 68% and Germany by 60%, according to Mexico’s Tequila Council, well outpacing the global growth rate of 2.3% .

Although still far from a serious attack on the dominant position held by whiskey, rum or gin in Europe, tequila has managed to gain an important foothold and is the spirit with the strongest growth rates, according to José Cuervo, trader at Proximo Spirits. .

How much is a kilogram of agave?

But this explosive growth also has unintended consequences. Demand from Europe has exacerbated the crisis in agave, a plant native to Mexico’s Jalisco region that is used to make tequila. For most of the past two decades, the price of agave has hovered between 5 and 7 Mexican pesos ($0.27-$0.37) per kilogram, but it has exploded in recent years and will peak at 31 pesos by the end of 2022, according to research firm Bernstein.

Current forecasts for the end of 2023 are 28 pesos per kilogram, but analyst Trevor Stirling warned that demand for wonder continues to rise.

• “This is a problem of supply and demand. There is a significant shortage of agave in the tequila industry,” says Trevor Stirling.

Consumers in Europe paid nearly 16% more for tequila in stores in December 2022 compared to the same month in 2021, while whiskey prices rose 6% and vodka prices rose 5%, according to research firm NielsenIQ. . Gin prices remained unchanged.

“Plants have become more expensive, and so has getting them from Mexico,” says Robin Evans, manager of Hacha Agaveria, an east London bar specializing in tequila and mezcal.

Demand for tequila in Europe in 2022 is not an isolated phenomenon, say some analysts, who point out that the drink has gradually gained momentum over the years and has been exacerbated by home isolation during the pandemic. Exports to the UK, Germany, France and Spain are up an average of 60% in 2021, even outpacing last year’s larger jump of 73%, according to Mexico’s Tequila Representative Council.

Michael Merolli, head of tequila at Pernod Ricard, points out that there are far fewer tequila brands in Europe than in the US, where the market is more mature and competitive, with new brands appearing every week.

“Premiumization,” a strategy in which brands emphasize quality and exclusivity, also contributed to price increases, Merolli said.

Some industry players believe the crisis for agave, a plant that takes about seven years to mature before it can be harvested, will be resolved in a few years. Agaves planted several years ago will be ready for harvest, says Luis Fernando Felix, director of the U.S. and Canada of Proximo Spirits, a subsidiary of Mexican group Becle, which distributes the Jose Cuervo brand.

• “In about two years, the price of agave will go down because the supply will be greater than the demand,” added Luis Fernando Felix.

(Source: Agerpres / PHOTO: Dreamstime.com)