CELEBRITY TEQUILA
WR ITTE N BY RAC HEL WR IGH T
THE REAL HANGOVER
A
merica loves tequila, and there seems to be no signs of slowing down. Since 2004, the volume of consumption of tequila in the United States has more than doubled in quantity, reaching 18.5 million nine-liter cases in 2018. Economic indicators and analysts suggest continued growth in consumption globally and within the United States.1 However, tariff regulations, financial and international trade issues, and issues with the sustainability of agave place the tequila industry at risk. These risk factors have greatly changed the culture surrounding tequila consumption in the United States and pushed tequila brands to find other economic strategies to market and distribute products. This has led to the era of celebrity tequila and influencer brands. According to a study on the growth of the tequila market, the worldwide market for tequila is projected to grow at a Compound Annual Growth Rate (CAGR) of roughly 4.1 percent over the next five years. Analysts project that the tequila market will grow from $4.6 billion in 2019 to $5.9 billion by 2024.2 Recognizing the growth of the industry, global conglomerates and large distribution companies have purchased many of Mexico’s haciendas and tequila brands. In 2002, rum giant Bacardi Ltd. acquired Cazadores, a Mexican brand dating back more than 80 years. In January of 2018, Bacardi also purchased
Patron Spirits Co. for $5.1 billion.3 Following suit, Beam Suntory purchased Sauza in 2005. In 2006, Brown-Forman Corporation purchased Herradura, a family-owned brand, for over 125 years. 2014: Diageo purchased Don Julio, fully obtaining operations, and in 2017 acquired Casamigos Spirits Co. for $1 billion.4 While this investment on its surface seems positive for the traditional Mexican spirit, the quick growth and increased distribution is leading to issues in sustainability, production regulation, and cultural appropriation. International acceptance of Denomination of Origin in the tequila industry and its vast expansion in international markets has created a cycle of surplus and shortages of blue weber agave.5 Agave plants mature slowly. Blue weber agave, which by law must make up at least 51 percent of any product labeled tequila, takes on average seven years to mature. This makes blue weber agave prone to natural boom and bust cycles.6 During periods of an agave shortage, small farms are most negatively impacted, as farmers likely do not have sufficient capital to maintain the plantation and production. Likewise, large tequila companies become more self-sufficient in their agave production, and supply will further
consolidate the market leaving only small producers exposed to the risk of surplus and shortage of agave cycles.7 The booming demand for agave has also had serious environmental consequences, as farmers increase the use of chemical processes to keep up with production. The practice of early harvesting of unmatured agave is an environmental concern. This practice removes the flowering of agave plants, a critical food source in Mexico’s ecosystem.8 According to a study by Bowen, agave growers are increasingly trading more traditional, labor-intensive practices for more chemical-intensive but labor-efficient practices, a reflection of the pattern of applying chemical inputs by trained engineers over the expertise of experienced but uneducated jimadors (agave farmers).9 Although Kendall Jenner may be currently getting the most criticism for launching her 818 tequila brand, named after the Calabasas, California area code where her family resides, she is certainly not the first celebrity to invest in the world of tequila for namesake and profit.10 In 2020, there was a 65 percent increase
3 Heugel, Bobby. “Sales for Tequila Have Never Been Better. But Quality? Not So Much” Bloomberg Businessweek, no. 4557, 5 Feb. 2018, pp. 63–65.
8 Bowen, Sarah. 2008. Geographical Indications: Promoting Local Products in a Global Market. Unpublished Ph.D. dissertation. Madison: University of Wisconsin-Madison.
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See id.
1 “Mexico: Export Volume of Tequila by Country.” CRT, Consejo Regulador Del Tequila, Oct. 2019, www.crt.org.mx/EstadisticasCRTweb/.
5 Bowen, Sarah, and Ana Valenzuela. 2009. “Geographical Indications, Terroir, and Socioeconomic and Ecological Sustainability: The Case of Tequila.” Forthcoming in Journal of Rural Studies.
2 “4.1%+ Growth for Tequila Market Size Raising to USD 5910 Million by 2024.” MarketWatch, Market Study Report, 29 May 2019.
6 The Agave Industry Faces Sustainability Challenges.” FoodPrint, 4 Dec. 2020, foodprint.org/blog/ agave-industry/.
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7 Bowen, Sarah, and Ana Valenzuela. 2009. “Geographical Indications, Terroir, and Socioeconomic and Ecological Sustainability: The Case of Tequila.” Forthcoming in Journal of Rural Studies.
9
See id.
10 Vargas, Mirella. “Celebrities Need to Stop Making Their Own Tequila Brands: Talon Marks.” Talon Marks | Cerritos College • Norwalk, Calif., 11 Mar. 2021, www.talonmarks.com/opinion/2021/02/25/ celebrities-need-to-stop-making-their-own-tequilabrands/.
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