Tequila Is About to Get a Lot More Expensive, Here’s Why
Tequila is more popular than ever with celebrity endorsements and major investments helping to bolster its image, but there’s a hitch that may slow things down and increase prices: an agave shortage with no quick answer.
According to Reuters, Blue Weber agave shortages will continue into 2021 and will likely impact the price of tequila. The Tequila Regulatory Council and National Tequila Industry Chamber told Reuters that the 140 registered tequila companies need 42 million blue agave plants this year. There were only 17.7 million agaves planted in 2011 for use in 2018. Typically the plant take seven to eight years to mature so that it’s ready for tequila production.
And the agave plant’s long growth time doesn’t match with rapidly rising interest in the spirit. That is forcing producers into a vicious cycle in which they use younger plants and cut into future supply. A grower named Marco Polo Magdaleno told Reuters that he can “guarantee” tequila makers are using not-quite-ready, four-year-old plants “because I have sold them.”
As supply goes down, prices go up. Since 2016, the price of agave per kilo has gone from 3.85 pesos (around 0.21 cents) to 22 pesos ($1.18). Cheap tequilas and small-scale producers are impacted the most, while premium tequilas can absorb some of the costs. That doesn’t mean they’re immune, though. A director of strategic planning at Patrón told Reuters that the agave shortage is “a crisis of success of the industry,” but that the company hasn’t had any problems paying for agave yet. The president of the National Committee for Agave Production in Tequila is less optimistic, however, adding that the group is “sure this [shortage] will have a strong impact on the big firms such as Cuervo or Sauza.”
Good things take time, and quality tequila is a good thing. Unfortunately that means we may have to pay up and drink less in the short term.