Mezcal On Track For Further Gains, Despite Short-Term Slowdown

While still a fraction of the size of Tequila, the dominant agave spirit, mezcal is benefiting from an influx of new brands and extensions, catering to both category aficionados and first time drinkers. For 2023, Impact Databank estimates that mezcal exports to the U.S. were at 803,000 cases, a dip from 2022, when the category nearly cracked 900,000 cases. Still, consumer interest has continued to grow, especially as larger on-premise players consistently feature the category on cocktail menus.

“Mezcal continues to be a very attractive category, and the short-term slowdown is driven by the overall headwinds of the spirits industry,” Mauricio Vergara, Bacardi’s president and COO for d’Ussé Cognac, Patrón Tequila, and Ilegal mezcal tells SND. “Mezcal is extremely well-positioned to capture trade and consumer interest and continue its growth trajectory as the spirits industry normalizes. Even within the short-term slowdown in the category, Ilegal continues to outperform.”

Pernod Ricard’s Del Maguey remains the top player in mezcal in the U.S., with volume at 91,000 cases last year. The brand is present in both the entry level and aficionado segments of the category, with its flagship Vida range serving as a common entry point. Higher up the ladder, Del Maguey’s releases cover expressions made in individual villages in Mexico as well as a line focused on mezcal made from individual varietals of agave.

Vying for the top of the market with Del Maguey, Bacardi’s Ilegal held its ground last year at 85,000 cases. Ilegal—with a portfolio covering an unaged Joven, 6-month-old Reposado, and 13-month-old Añejo, plus special releases—performs particularly well in New York, California, Illinois, and Texas. Founded by John Rexer in 2006, last fall the brand was fully acquired by Bacardi, previously a minority shareholder. Terms of the deal weren’t disclosed, but earlier in 2023 it was reported that Bacardi could close the deal for less than $200 million.

CNI Brands’ Banhez is the third-largest mezcal brand in the U.S., and outsped the headwinds to rise 4.7% to 67,000 cases last year, continuing its steady climb. Banhez has grown every year since 2018, when it was at 17,000 cases, averaging 32% growth between 2018 and 2023. Banhez’s portfolio is vast, with the company partnering with Oaxacan growers across the region to create mezcal made from numerous agave varietals, including the brand’s flagship Ensamble, made from Espadin and Barril agaves.

“We were subject to the same sort of macro headwinds that everybody else was with consumer pullback, retailer slowdown, and fewer on-premise visitors,” said Curt Goldman, CEO and cofounder of CNI Brands. “With mezcal in general, but certainly for us, we’re very much skewed to the on-premise.” Goldman expects a shakeout in the category looking ahead, but remains bullish on the outlook for Banhez, predicting it will return to double-digit growth this year.

The fourth-largest mezcal brand, Proximo Spirits’ 400 Conejos, showed the strongest percentage growth of any of the leading brands in 2023. The brand jumped 78.3% and cracked 50,000 cases for the first time. For comparison, the brand depleted fewer than 500 cases as recently as 2019. Since then, it has doubled nearly every year.

Rounding out the top five is Diageo’s Casamigos mezcal, the smoky cousin to the George Clooney-affiliated Tequila juggernaut. Last year, it was down 9.5% to 50,000 cases in the U.S. The mezcal, made from Espadin agave, has still seen considerable gains since its debut, growing from 8,000 cases in 2018 to commanding a 6% share of the U.S. mezcal market in 2023.—Shane English

Tagged : 400 Conejos, Bacardi, Banhez, Casamigos, CNI Brands, Del Maguey, Diageo, Ilegal, Pernod Ricard, Proximo

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