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Mezcal, the “Other” Mexican Spirit, Shows Strong Niche Growth In The U.S. Market

December 27, 2012

Distilled from agave plants native to Mexico’s southern region in and around Oaxaca, Mezcal has flourished since the Spanish Conquest. It’s still made in small batches in backyard pit ovens fueled by oak and eucalyptus, and the category comprises over 9,000 producers and more than 150 brands.

Partly because of that fragmentation, Mezcal never has been able to match Tequila’s marketing muscle. Also, some consider its smoky taste too potent for mainstream drinkers. Most retailers and bar operators thus see it as a niche.

But that niche is expanding. According to Mexican government data, about 38,300 nine-liter cases of Mezcal were exported to the U.S. in 2011. That’s a blip—about 200 bottles of Tequila are produced in Mexico for every single bottle of Mezcal—but the total was up 48% from just 25,900 cases in 2007.

The positive trend is being driven importers like Frederick Wildman & Sons, which markets the Ilegal label that encompasses a blanco ($48), reposado (with 2 to 4 months of age, $59) and an añejo (13 months, $89). Tim Master, Wildman’s director of spirits, projects a sales jump of 15% to 5,000 cases for 2012. “Mezcal won’t ever beat Tequila,” says Master. “It’s the artisan end of the agave distillate world, for explorers who enjoy wilder flavors.”

But there are plenty of staunch Mezcal fans. Jeret Pena, owner of the Brooklynite bar and restaurant in San Antonio, Texas, offers 10 Mezcals, with prices ranging as high as $40 for a 2-ounce pour of the Del Maguey Pechuga, imported by Sazerac Co.’s Gemini Spirits division and priced at $220 a bottle at retail.

“Mezcal has a small audience,” Pena says. “It belongs alongside peaty Islay Scotches like Ardbeg and Lagavulin. Not everybody goes for tastes like that. But I use it in cocktails for extra texture and aromatic mouth feel. Sometimes I put it in an atomizer and spray it over the top of a cocktail.”

In Seattle, Andrew Friedman, owner of the Liberty Bar, carries 40 Mezcals, priced up to $40 a 2-ounce pour of Del Maguey Tobala, harvested from a rare wild agave. “I always go for Mezcal over Tequila,” Friedman says. “People have been led to believe that Mezcal comes only with worms in the bottle and the quality is inferior. But some of the best spirits today are Mezcal. Americans are just getting educated.”

The country and western crowd is catching on, with endorsements from entertainers like Toby Keith. At his 15-unit I Love This Bar and Grill chain, Keith sells his own Wild Shot brand, launched two years ago. It comes in two expressions—the unaged Wild Shot Silver ($40 a 750-ml.) and Wild Shot Reposado ($46) with just two months in barrel. Importer Shaw-Ross International brought in 2,000 nine-liter cases in the first year and has seen 30% annual growth, according to brand manager Rod Simmons.

Other brands are searching for recognition. One of the biggest in Mexico is the Zignum label, produced at Casa Armando Guillermo Prieto distillery in Oaxaca. Handled by Miami-based Park Street Imports, Zignum was introduced in the U.S. in 2011 and is available in Florida, Texas, Illinois and New York. The Zignum line comprises a silver at $29, a reposado at $33 and an anejo at $50.

Some Mezcal producers are pushing boundaries. Ron Cooper, owner of Del Maguey, considered the No.-2 Mezcal in the U.S. behind Monte Alban, is experimenting with aging in Cabernet Sauvignon, Sherry and Bourbon barrels. Some end up as small special releases for retailers like Park Avenue Liquor in New York, where one label is vintage-dated 1995 and retails at $320. “Wine and whiskey casks are the next frontier in Mezcal,” Cooper says.

Doug French, master distiller behind the Scorpion brand, no longer roasts his agave in traditional wood fires and is now using plain steam during distillation. That has resulted in spirits with little or no smoke—and a potentially broader audience. He too is experimenting with aging—as long as seven years in one blend.

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