Of course there is much to celebrate on International Tequila Day (24th July), as Mexico’s “gift to the world” reached unprecedented sales volumes in 2022. However, a question remains on whether the golden age of Tequila will continue after its main export market – the USA – suffered slower sales in 2023.
For reference, The Mexican Chamber of the Tequila Industry (or Camara Nacional de la Industria Tequilera, CNIT) is the leading institution in charge of representing, promoting, and defending the general interests of the Tequila industry as well as Tequila itself. The CNIT also makes available data for production and sales of Tequila for those interested to know more about the industry.
Tequila sales in 2023 faced a reduction of 17.5 million litres in comparison to 2022, albeit most of that loss came from the lower value standard category, whilst Tequila 100% Agave has remained broadly flat. Looking ahead to more recent data available, the first 6 months of 2024 has shown a further overall decline from 216 million litres in 2023 during the same 6 months period to 196.3 million Litres.
This is the most significant decline in sales volumes of Tequila 100% Agave with a 7.9 million litres reduction from 137.7 in 2023 to 129.8 in 2024 for the first 6 months of the year.
Hopefully the 2nd half of 2024 will be more positive for the Tequila category despite a slow down in the explosive growth experienced by Tequila until recently. The Spirits Business has reported on a number of different factors affecting the category, from inexperienced new entrants investing in agave-growing to a glut of agave becoming ripe and ready for production (leading to a drop in agave prices, which in itself is positive).
In the USA, the first 6 months of 2024 generated sales of 164,259,690 litres of Tequila, a drop of just over 1.2 million litres in comparison to 2023 for the same period (2023 = 165,477,136 litres) but a relatively small drop for its Number 1 export market. Note that Tequila 100% Agave was responsible for the loss of 0.93 million litres during that period.
In terms of format, most of the loss in 2023 has come from Bulk whilst Bottled goods has suffered a much lower drop and this is a reflection of the category of Tequila represented by bulk.
Tequila production has matched the drop in demand in recent years with a reduction in production in 2023 by 52.7 million litres in comparison to 2022. As the category reacts to the market conditions, this is exacerbated further in 2024, with the initial 6 months showing a further decline in production by 97.4 million litres (2023 = 359.9 million litres for Jan-June period).
The reduction in Tequila 100% Agave during the first 6 months of 2024 is the largest seen to date, with a reduction by 65.7 million litres.
Despite these temporary reductions in production and market headwinds, opportunities remain aplenty for the Tequila category around the world. Product innovation, education, more price-accessible products (helped by lower agave prices), mixology, and supporting the category growth in markets outside of North America will hopefully prolong the golden age of Tequila for many more years to come.
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