Global Tequila/Local Crisis

We’ve had a string of shocking news out of Jalisco over the last year. It all started with George Clooney, as so many things do. He managed to flip his new new tequila brand for nearly a billion dollars to the owners of Don Julio. No questions that a hefty chunk of that windfall is tied to Mr Clooney’s continued involvement as the face of the brand, but the simple fact that the intellectual property could be worth this much is astonishing. The largest drinks company in the world (who already owns a massively popular tequila brand) paid almost a billion dollars for a name, a face and some really goodwill, but didn’t actually buy anything tangible. Consider that Cuervo, the world’s largest producer of Tequila, recently raised about $900 million in an early 2017 IPO. This values that massive company at around $6-7 Billion, but they own multiple distilleries across many categories. The disparity is shocking, but not surprising considering the costs to produce bulk tequila. Indeed, prices on agave have been historically low for many years. Big producers have likely stock piled inventory while costs were cheap, while at the same time some large growers didn’t bother to harvest many fields since the cost of labor outweighed the financial gains.

But, something changed last year right around the time of this sale. Whether it was spurred on by the sale of Casamigos or simply a strangely timed coincidence, midway through last year murmurs began to build about an impending agave shortage.What does that mean for the average tequila distiller? Well, you have a few options. Either you harvest younger plants, which won’t have as much sugars and may require additional processing to extract a usable amount of energy to make them worth your time and money. You pay the higher price at market for agave and raise your prices to the consumer. You invest in new technology, like autoclaves, diffusers, efficiency experts and laboratory technicians to squeeze every drop out of the few plants that you can secure. Or most likely, you’ll do ALL of these things and hope for the best.

The situation isn’t so dire for the large landowning distillers. They’re bulk tequila business might not be turning the same profits as before, but they’re required to sell themselves agave at market prices, so now the farming business is looking pretty good, as long as they have agave to sell at all. Those large scale land owning distillers will dictate the price of agave for the foreseeable future and when they see someone like George Clooney making a billion dollars off their land and labor, you bet they’re going to do everything in their power to make sure they claw as much of those profits back as the category continues to grow.

The real savvy producers have likely stockpiled enough spirit over the last five years to continue expanding without raising prices significantly and will be in a great position to attack the market share of smaller third party brands that will be forced to increase prices to continue operating. There’s no doubt that Sauza and Cuervo will be just fine through the crisis, which isn’t projected to alleviate until at least 2021.

These two massive brands control a great deal of market share, but their certainly not the only players in Jalisco. Enter TEQUILA SUPREMO! Known in Jalisco by the trade name Casa Camarena, the house was founded in 1938 by Don Augustine Camarena, brother of the famed distiller Don Felipe Camarena who founded La Altena just a few miles away. The prominent agave growing Camarena family came from Spain in the 1700s and began growing agave in the 1860s. Just over a century later, Don Augustine’s daughter-in-law Dona Elena Herrera Orendain takes over the family distillery. Since then they’ve grown to be the fourth largest distillers by volume.

Orendain is the great great granddaughter of Don Jose Cuervo and owns more than 3 million agave planted throughout the highlands. The Camarena, Cuervo, and Orendain names ALL represented in one distillery? It must be a massive behemoth of modern gadgetry and scientific precision, right? But instead Casa Camarena is committed to producing traditional tequila the old fashioned way. For their “Premium” brand Azteca Azul, they utilize only 8+ year old highland agave. It’s roasted EXCLUSIVELY in traditional volcanic stone ovens for more than 48 hours before fermentation and double distillation on steel then copper pot stills. The result is proper highland tequila with all the fragrance and freshness that you’d expect. Now the real kicker, it’s only $17. WHAT?!?!? But why? How? An estate grown, 100% agave oven-roasted pot distilled highland blanco tequila bottled and shipped to the states for less than $17 retail a liter. It seems too good to be true, but the proof is in the pudding. As I said, this agave shortage fits precisely into someone's plan. We just need to know who!

Azteca Azul Blanco Tequila (1L) $16.99

Azteca Azul is produced by one of the finest highland distillers in the world, Tequila Supremo. Known commercially as Casa Camarena, the famous house was established by Augustin Camarena in 1938. The prominent agave growing family founded the town of Arandas and multiple distilleries in the. The woman who runs the distiller, Dona Elena Herrera Orendain, is Tequila royalty. The great great granddaughter of Don Jose Cuervo, she's built Casa Camarena into Jalisco's fourth largest distiller that you've never heard of. Despite their size their commitment to quality is unparalleled. Azteca Azul is a 100% pure blue agave matured a minimum of 8 years on of one of the Camarena's 18 agave growing estates. The agave is cooked and cooled in traditional brick ovens before being twice distilled on steel then copper stills. Tequila Supremo has also developed a process known as "Zero D," which ensures that the distillery emits no waste by composting and recycling every possible waste product throughout the process. Tequila Supremo was the first tequila producer to be 100% environmentally friendly, but their commitment to sustainability doesn't come at the expense of quality or increased cost to the consumer. Easily one of the best values in tequila and quickly becoming our staff's go to blanco for sipping, mixing, parties, gifting and life in general.

We're the only ones stocking this exceptional tequilas at this ridiculous price so take advantage!

-David Othenin-Girard

David Othenin-Girard