StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions
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StateWays | www.stateways.com | May/June 2017 28 TEQUILA | CATEGORY UPDATE Preliminary numbers from the Beverage Information & Insights Group show tequila overall continuing to grow at a healthy 5% clip, capitalizing on the shift towards high-end spirits, and last year hitting 15.7 million nine-liter cases. Now, about half of tequila exports are 100% agave, compared to less than 15% of brands over a decade ago. PLANNING FOR FUTURE SALES While this level of growth is clearly good for a spirit that counts the U.S. as the most signifi cant export market by far, manag- ing that growth has increasingly become an issue south of the border. Tequila may be the most agriculturally-dependant spirit sold; a steady supply of healthy 8-to-12-year-old agaves re- quires the sort of planning and foresight not required for other spirits. Corn grown to make bourbon, rye for the whiskey that bears its name, and even grapes for brandy and Cognac, are an- nual crops and producers of those spirits rarely grow their own source material. Longer growth time, regional restrictions and limited availability that agave productions entail often mean tequila producers are growers as well as distillers. And now, with the increased interest in tequila's aged ex- pressions and innovations, producers each year sell more re- posado, añejo and extra añejo versions, on aggregate, than ever before, making steady supply of both agaves and aged products more important as these pricier expressions gain popularity. That makes planning integral to the future success of tequila. For smaller brands without their own distilleries, longer-term deals with distillers are essential. For most of the larger brands, a combination of piñas matured in brand-owned fi elds plus purchases from contracted suppliers is standard. "We own our own fi elds and production,' says Pernod Ricard USA's Altos brand director, Tina Reejsinghani. "Yes, there are always out- side infl uences and supply issues, but as much as possible we don't let it affect our business and that helps in keeping the price accessible." Like most brands, those in charge of Altos make sure aging stock is available for markets using a forecasting model, estab- lishing some level of control based on market expectations for the next few years while keeping track of how different expres- sions are selling, especially now that the brand has recently introduced an añejo expression.