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Leading Players See Ongoing Upside For Mezcal

February 14, 2023

While the surge in agave spirits in the U.S. has mostly been driven by Tequila—now the second-largest spirits category in value, after vodka—mezcal is also seeing impressive growth, albeit from a small base. Primarily made in Oaxaca, Mexico, from a variety of agave types, mezcal saw an estimated 868,000 cases exported to the U.S. last year, up from merely 57,000 cases in 2012, according to Impact Databank. Mezcal continues to grow internationally too, with the category surpassing one million 9-liter cases last year for the first time on a 23% gain.

Mezcal is an upscale proposition in the U.S., averaging more than $40 a bottle at retail. Among all spirits, mezcal is second only to single malt Scotch in terms of highest average price-per-bottle. “Mezcal has a very bright future and the category should continue to have strong double-digit growth. Though still small, the category has arrived and has momentum,” said John Rexer, founder of U.S. category leader Ilegal.

Last year, Ilegal grew by 85% to 174,000 cases, according to Impact Databank, continuing its trend of nearly doubling annually. Though the brand received a minority investment from Bacardi back in 2017, Ilegal continues to operate independently. “It’s quite exciting to see the broader market really embrace mezcal. A good indication of this are national chains which are now bringing in Ilegal, as well as our growth in the secondary markets like Georgia and New Jersey,” said Rexer. “Our growth was driven in part by landing on menus in approachable cocktails that the customer already knows and enjoys—think Palomas, Margaritas, and Mules, to name a few. It’s been a great way to bring customers into the category and has been a huge success in driving sales for our on-trade partners.”

Pernod Ricard’s Del Maguey was up 35% to 116,000 cases in 2022, making it the second mezcal brand to reach six-figure annual depletions. The brand is led by its flagship, entry-level offering, Vida, which is made from Espadín agave. In addition to the main 42% abv bottling of Vida, Del Maguey also offers Vida de Muertos, a 45% abv version distilled to celebrate Dia de los Muertos, as well as mezcals distilled in individual villages in Oaxaca and a series focused on different varieties of agave.

CNI Brands’ Banhez is the third-largest mezcal in the U.S. at 71,000 cases. Last year the brand was up nearly 30%. “In 2022, similar to many brands, we saw a big surge forward with the on-premise,” said CNI Brands CEO Curt Goldman. “We’ve seen a very strong start in January. And all the signals are that mezcal is going to continue to outperform in 2023.” Goldman added that on the retail side Banhez faced tough comps compared to 2021, but that the brand continued to grow. Banhez’s portfolio is led by its Ensamble release, a 42% abv mezcal distilled from Espadín and Barril agaves.

Of mezcal’s appeal, Goldman points to the stories that many brands, including Banhez, are able to tell about the villages and people who distill the spirits. He said that Banhez currently works with 75 families who bring their traditions, distillation styles, and choices of agave into the brand, creating a varied and collectible portfolio that shows the breadth of flavors that all fall under the wider mezcal umbrella. “We have all these hard to find, hard to produce expressions that really showcase the capabilities of our co-op,” he said. “There’s a lot of trade up opportunities.” We’ll have more on some of mezcal’s up and coming contenders in the second part of this feature.—Shane English

Leading Mezcal Brands in the U.S. Market
(thousands of 9-liter case depletions)
Rank Brand Company 2021 2022 Percent
1 Ilegal Ilegal 94 174 84.6%
2 Del Maguey Pernod Ricard 86 116 35.1%
3 Banhez CNI Brands 55 71 29.3%
4 Casamigos Diageo 42 55 31.0%
5 400 Conejos Proximo Spirits 13 29 125.3%
6 Montelobos Campari 15 20 35.1%
Total Leading Brands2 305 465 52.6%
1 Based on unrounded data
2 Addition of columns may not agree due to rounding
Source: IMPACT DATABANK © 2023
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