Mezcal is an organic, gluten-free, distilled alcoholic beverage made from the agave plant. It can be distilled from over 36 species of agave (maguey) and is majorly produced in Mexico. All mezcals are not tequila, but all the Tequilas are mezcal. Moreover, Mexico owns around 330,000 hectares of cultivating agave for mezcal, which is owned by 9,000 producers. These producers generate over 6 million liters of premium quality mezcal annually, with over 150 brand names. Globally more than 2 million of mezcal is exported, generating USD 21 million in revenue. According to the World Intellectual Property Organization, national producers in Mexico possess exclusive right to charge additional incentives and can also increase trade and marketing activities of the beverages titled under Tequila and Mezcal in the European market.
Demand for Anejo Mezcal to Grow Two-Fold
Global mezcal market study is broadly segmented by type and sales channel. By type, the mezcal market is further segmented into Joven, Reposado, and Anejo. Joven accounted for the largest revenue share in 2018. Although Anejo is currently witnessing limited demand from consumers, it costs more than regular alcohol and other types of mezcal. The market is projected to experience an upsurge in the coming years on account of growing disposable income and rising preference for premium alcohol. Manufactures invests significant time in aging Anejo, a typical drink is aged for more than 18 months in two types of barrels. The first barrel is made from charred American oak, whereas the second is made from toasted French oak. Moreover, extended barrel aging gives additional nuttiness and caramelized orange flavor to the drink, whereas layers of baking spice and smoked butterscotch balances the stewed tropical fruit and brightness of the agave. It justifies the high price tag coming with the product.
E-commerce to Become Convenient Way for Shopping Alcoholic Beverages
By sales channel, the market is segmented into e-commerce, supermarkets, and convenience stores.
E-commerce is slowly stepping foot in the global mezcal market. Stringent government regulations and delivery restrictions on the product in most of the countries across the globe are compelling manufacturers and distributors to reduce their sell through online platform. Recently, few countries have relaxed the government norms regarding online sales of alcohol, which is likely to offer relief for players to some extent. This is further supported by growing preference of consumers for e-commerce sites as they offer the same product at a competitive price, plenty of options to choose from, and ease of click-and-collect pickup and home delivery models. For instance, in the U.S alone, consumers spent more than USD 230 billion on alcoholic beverages, out of which online alcohol sales generated USD 1.7 billion in 2017, U.S. Department of Commerce.
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Demand for Mezcal to Soar in Asia Pacific
Global mezcal market is segmented into North America, South America, Europe, Asia Pacific, Middle East and Africa.
Europe is the second leading mezcal market globally and is likely to continue the same during the forecast period. This can be attributed to rising per capita consumption of alcohol. Over 43.8% people falling in age group 15–19 are consuming alcohol in the region. On average, the region consumes 12.5 liters of alcohol annually. Some of the leading countries in western Europe like the U.K, Germany, Belgium, Spain, and France are increasingly driving the demand for premium mezcal.
Lately, mezcal has started witnessing increasing demand, especially from the young population in Asia Pacific. Imported spirits, especially premium and super-premium brands are gaining significant popularity in China. In 2015, China increased the import of alcohol by 55.6%. In addition to China, Indian is also likely to continue the same trend on account of rising awareness and growing preferences for premium drinks such as mezcal. Rising tourism activities, shifting preference of consumers to mezcal, and availability at low prices are expected to escalate the India mezcal market growth during the forecast period.
Middle East and Africa are witnessing slow growth and are likely to continue the same in the global mezcal market due to major presence of Muslim countries and high taxes on alcohol. However, mezcal is getting popular among South African drinkers. This has led to other agave spirits to soar as a local beverage. In 2017, South Africa witnessed increased demand for mezcal by 128%.
Mezcal Market to Experience Consolidation
Consolidation is one of the recent trends in the global mezcal market. Several leading players are undertaking mergers and acquisitions activities to increase their market share. In June 2017, Pernod Ricard signed an agreement to acquire majority of stakes of Del Maguey Single Village Mezcal. Del Maguey Co. employs ancient production processes that have been passed down for hundreds of years. It also employs traditional organic methods combined with diverse microclimates and terroir of Mexico to produce quality products. Its regional revenue in America, Europe, and Rest of the world and Asia is accounted for USD 2159 million, USD 2368 million, and USD 3093 million respectively.
In February 2017, Bacardi announced to buy minority stakes in Illegal Mezcal.
In addition, in May 2018, Diageo acquired, Pierde Almas S.A. De C.V to accelerate the development of mezcal in Mexico and increase the global reach. Pierde Almas S.A. De C.V is engaged in the manufacturing of mezcal using Agave species. It produces mezcal products having an alcohol content ranging from 50% to 52%. Pierde Almas is the first Brand in México to bring mezcal out of the villages. In 2018, the company generated total revenue of USD 15.5 million.
Rey Campero, El Silencio Holdings, INC Fidencio Mezcal, Los Amantes Mezcal S.A. de C.V, Lágrimas de Dolores, Gem & Bolt, LLC Mezcal Vago, and Fidencio Mezcal are some other leading players in the market.
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