Mezcal Continues Its Move Into The Mainstream

While Tequila remains one of the fastest-growing categories in the entire beverage alcohol industry, agave supply issues have affected some producers, and high inflation has curbed demand somewhat. But the much smaller Mezcal segment continues to grow at double-digit rates, according to Impact Databank, as the on-premise sector’s recovery continues. Mezcal is generally overrepresented in the on-premise, where drinkers can sample the Mexican spirit in trendy new cocktails without committing to purchasing a full bottle.

Globally, Mezcal shipments surpassed one million 9-liter cases last year for the first time ever, after a 23% gain over 2020, according to Impact Databank. The U.S. remains the largest market for Mezcal—ahead of the home market of Mexico—and now represents over half of the global category. Last year’s volume in the U.S. was a three-fold increase compared to just four years prior. The pace had slowed to a modest 12.5% in 2020 due to the pandemic’s crippling effect on the on-premise sector, but the former trajectory has now resumed, and only spirits-based RTDs are currently growing faster than Mezcal.

The category is represented by a few well-known spirits companies, including Bacardi USA, which has a minority stake in number-one brand Ilegal, and four labels from Diageo—Casamigos, Sombra, Pierde Almas, and Union. According to Impact Databank, the market’s second largest-selling Mezcal is Pernod Ricard’s Del Maguey label, which derives around two-thirds of its sales from the on-premise. Beyond the category leaders, many emerging Mezcal brands are trying to capture market share, including CNI’s Banhez, 3 Badge’s Bozal, and Mezcal Vago, part of the Samson & Surrey portfolio acquired earlier this year by Heaven Hill Brands.

In NielsenIQ channels for the 44 weeks ending November 5, Mezcal dollar sales were up 11%, and the average price continues to increase year over year, now at $41.14 a 750-ml. Among all spirits, only single malt Scotch has a higher average per-bottle price than Mezcal—according to Impact Databank—illustrating that the category is driven by the upscale end, and that consumer demand continues to rise despite the high entry cost. Moving forward, agave management will be key for Mezcal producers to retain their quality reputation and maintain current growth trends. —Juan Banaag

Tagged : 400 Conejos, Banhez, Casamigos, Del Maguey, Ilegal, mezcal, Montelobos

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