The global mezcal market size was valued at USD 338 million in 2022. It is projected to reach USD 2115 million by 2031, growing at a CAGR of 22.6% during the forecast period (2023-2031).
Mezcal is an organic, gluten-free, refined 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 tequilas are mezcal. According to the World Intellectual Property Organization, national producers in Mexico possess the exclusive right to charge additional incentives and can also increase trade and marketing activities of the beverages titled tequila and mezcal in the European market. The mezcal market is emerging with increasing consumption worldwide. The agave plant is popularly found in the region of Oaxaca in Mexico. This region has 570 of 625 mezcal production facilities in Mexico. It is also grown in other arid regions such as Guanajuato, San Luis Potosi, Zacatecas, Michoacán, Durango, and Puebla.
|Market Size||USD 2115 million by 2031|
|Fastest Growing Market||Europe|
|Largest Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
The tendency to market beverages like cold-pressed juice, craft beer, and smoothies with natural ingredients as premium is expected to grow in the near future due to rising consumer interest in products made with ethical sourcing. According to a survey conducted by the World Health and Wellness Council, healthy drinks, health, and plant sources experienced a 20% increase in Latin America between 2016 and 2020. Additionally, there is a growing market demand for organic beverages, particularly among millennials, who are more likely to spend money on high-end, premium products made from natural sources. In comparison to conventional drinks, natural non-alcoholic beverages are frequently marketed as healthier. Globally, people are becoming more aware of this. Latin America accounts for 20% of the world's organic trade in terms of volume, according to the Food and Agriculture Organization (FAO). Mezcal has a good chance of becoming a premium ingredient in the beverage industry as consumer demand for foods and beverages made with ethical sourcing is on the rise.
Opportunities for mezcal use will arise as the number of craft distilleries increases globally. The America Craft Spirits Association reports that there were 1,315 active distillers in the country in 2016 and 1,589 in 2017. Since the West has the most craft distilleries, it makes sense that this region would be a lucrative market for mezcal sales. In the United States, Canada, and Mexico, it's fashionable to combine craft beer and mezcal. Craft beer and mezcal have a long-standing relationship that will drive the market.
Environmental issues pose a serious threat to growth. First off, agave plants develop over a long period of time. Agave overharvesting is a persistent danger. Second, since wood is typically charred to heat the stills, deforestation is a concern, and its smoke is hazardous to those who make mezcal. In addition, the unpredictability of the political climate in Europe and America has caused a slowdown.
Drinks made with natural ingredients are becoming more and more popular with consumers today. The consumption of sugar substitutes and natural food additives has also undergone a noticeable shift. Additionally, the global market is flooded with nutrient-rich foods and beverages with a genuine brand commitment to flavor, taste, and quality thanks to the health-consciousness trend. Companies are creating goods with fewer processed ingredients and natural ingredient combinations to meet the burgeoning consumer demand for healthy, sustainable foods. They are also promoting convenience foods and foods for the on-the-go that have a healthy twist to satisfy the millenarian palate. The chance for consumers to try something different or use these products as a starting point for a plant-based lifestyle is therefore growing.
The global mezcal market share is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
North America region is the highest contributor to the market and is expected to grow the highest CAGR during the forecast period because of the presence of major market players in the region. The high preference of consumers for premium liquor brands such as mezcal in North America is driving market growth. In addition, consumers prefer mezcal for reducing stress and anxiety, which is further adding fuel to the overall demand for Mezcal in the region. For instance, 1,571 million liters of alcohol were produced in 2018 in the U.S., which was 1,481 million liters in February 2017. 5.8% up from the previous year. Additionally, in 2018, 1.5 million bottles of tequila were produced mainly for domestic use.
Europe is expected to witness dynamic growth. Europe has the highest rate of per capita alcohol consumption globally, and it has over 43.8% rate of alcohol consumption in the age group of 15–19. In the last three years, the demand for mezcal has significantly increased, followed by rising per capita alcohol consumption in Europe, which is around 12.5 liters annually. The demand for premium mezcal products has grown immensely in Western European countries such as the U.K, Germany, Belgium, Spain, and France. Currently, the market is witnessing increasing demand for specialized spirits like mezcal with more flavors.
Asia-Pacific is expected to witness significant growth in the mezcal market during the forecast period. The market is expected to grow at the fastest CAGR because of rising purchasing parity and the significant rise of the millennial generation in emerging countries like China, India, Malaysia, Thailand, and Indonesia. The underdeveloped markets in these nations have enormous potential and are likely to offer profitable opportunities in this region. Additionally, financially independent millennials are living with their parents in Asia and the Pacific, giving them more purchasing power. The craft spirit market in the region is anticipated to be impacted by millennials' preference to spend more on leisure activities in nations like China and India.
The LAMEA region is expected to witness moderate growth in the global mezcal market during the forecast period. South Africa has been witnessing a steady growth in the popularity of mezcal among South African drinkers.
The global mezcal market is segmented by type, product, and sales channel
Based on type, the global market is bifurcated into joven, reposado, and anejo.
The reposado segment is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period. Reposado is one of the most expensive drinks, which is majorly preferred by the young generation. The beverage can be aged for 6 months to two years in a charred American oak barrel, which gives it an exquisite flavor and tastes as compared to Joven and other drinks. The oak aging process brings out a smoky richness, with flavors of caramel, creme brulee, and dusty cocoa, which adds more value to the product.
The joven segment is expected to witness a higher CAGR. Joven is the most preferred drink followed by Reposado due to its similar flavor to tequila. The product is available in various flavors, including green apple, citrus, and white pepper. Joven is mostly preferred in cocktails to add the sacred flavor of sweet agave to the drinks. The heart of Joven is produced at a traditional Palenque in Matatlán, but it is grown and distilled in the Oaxaca region of Mexico.
Based on sales channels, the global market is bifurcated into supermarkets/hypermarkets, convenience stores, and e-commerce.
The supermarket segment is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period. Supermarkets majorly create brand awareness among consumers and help to sell products in huge quantities. In Australia, some of the leading supermarkets, such as Woolworth and Coles Supermarkets Australia Pty Ltd, are gaining an edge in the alcohol categories. In 2018, Woolworths dominated the alcohol retail sector with over 5.83 million customers. On the other hand, Coles Supermarkets Australia Pty Ltd has a customer base of over 2.41 million, and it is currently holding around 15.4% market share.
The e-commerce segment is expected to grow at a significant rate. The phenomenal increase in online sales, particularly at a time when overall and in-store sales have slowed, emphasizes the growing potential and importance of alcohol eCommerce in the market. Businesses that depend on physical locations, like wineries or distilleries, may need to think about a wider shift to eCommerce platforms as more consumers switch to online shopping.