14 minute read
AGAVE SPRITS
Agave turns over a new leaf
While tequila continues to perform strongly, the entire agave spirit category in Australia is diversifying, as Seamus May learns.
“Globally, agave spirits are booming,” says Peter De Vries, Head Distiller of Echuca Distillery.
He’s not wrong. Research published by IWSR in August of this year stated that: “Global spirit volumes are set to grow at a CAGR of plus two per cent between 2021 and 2026 – but tequila is predicted to exceed this comfortably, expanding at a CAGR of plus seven per cent over the same timescale.”
Andy Milne, Portfolio Manager for SouthTrade International, has also witnessed the category’s success.
The agave farm for Act of Treason, Top Shelf International’s Australian agave project
-Adam Pepper APAC Agave Ambassador Proof Drinks Australia
“Tequila is the fastest growing segment in Australia, seeing double digit growth as we approach summer. With the Margarita being Australia’s most popular cocktail, this number is only expected to grow further,” he said.
It’s a similar story with tequila’s sibling spirit, mezcal. Adam Pepper, APAC Agave Ambassador for Proof Drinks Australia (distributor of several agave brands including the Lost Explorer Mezcal), highlights this subcategory’s extraordinary recent growth.
“As of the market update in 2021, mezcal has a 4.1 per cent share in the Australian agave category, and has seen great growth from 2020 to 2021 with 33.5 per cent growth,” Pepper explains.
Mezcal makes its mark
“While mezcal has been around since the late 16th century, it is a reasonably new category in Australia and more brands have only come into the country over the last five years or so,” Pepper says.
For Nick Chappell, Co-founder and CEO of CNV Liquor, this means that the full possibilities of the mezcal category have yet to be realised.
“Whilst mezcal is definitely on the rise, I think it will be a year or two before we see its full potential in Australia,” he said.
Chappell also adds that the category’s storied history is both a help and ahindrance.
“Mezcal’s rich diversity makes it attractive to spirit aficionados, but this very same factor sets a high barrier of entry for those exploring the category, and who may be hesitant to invest in that first bottle,” Chappell continues.
-Andy Milne Portfolio Manager SouthTrade International
A similar position is held by HowardBaynie, Managing Director of specialist wholesaler, Agave Lux, who said: “We still need consumers to find a safe way to drink and explore.”
Baynie believes that retailers can help sell the category to drinkers through referencing easy and familiar cocktail recipes.
“The cocktail for both mezcal and tequila seems to be the safest way to enter the category,” Baynie says.
“We recommend starting with Tommy's margarita. Typically, they should only ever have three ingredients, your tequila and/or mezcal as your alcohol base, freshly squeezed lime juice and agave nectar. The tartness of the lime, the sweetness of the agave nectar allows the alcohol base to really shine in harmony.”
Breaking the norm
In practical commercial terms, mezcal is treated as a sub-category of the tequila category. In reality, the opposite is true.
Just as Champagne is a specific style of French wine limited to a certain location, so tequila is a certain kind of mezcal – which must be produced using the blue weber agave (agave tequilana) in the Mexican state of Jalisco, home to the city of Tequila, and carefully delineated areas in the states of Guanajuato, Michoacán, Nayarit, and Tamaulipas.
Put simply – all tequila is mezcal, but not all mezcal is tequila.
A key point of difference is the diversity of agaves that can be used to make mezcal, compared to the single agave that must be used to make tequila.
“It is like saying we can only use one grape varietal to make all wine,” Baynie says.
“Thankfully mezcal allows the use of approximately 30 different types of agave from the nine states of Mexico – so yes, you can have Shiraz, Pinot, Cabernet, Merlot, Pinot Gris, Chardonnay and so on all from different regions, states, and micro-climates.
“As a whole, mezcal is the underground buzz around town, from the influences of wild airborne yeast, to slow production methods and micro and nano-batch sizes, the meticulous and methodical handcraft, imparted over 500 years of heritage and culture, sprinkled with science and superstition sends this category into an unrivalled space of flavours to explore and discover,” Baynie explains.
To help de-mystify these products, Agave Lux has developed an online ‘agave school’, which introduces the plant, how it’s grown and harvested, denomination of origins, the history and production of various spirits, and how to drink them.
“The information on offer we have tried to keep simple and has been designed to guide you through the differences of each category,” Baynie adds.
The Lost Explorer Mezcal is another brand expanding the scope of the Australian mezcal market, with spirit made from three different kinds of agave on offer.
Tio Pedro from Santa Catarina Minas, Oaxaca
“The first way they can communicate the differences is through the age statement on the bottles displaying how old the agaves are before being harvested, eight year Espadin, 10 year Tobala and 12 year Salmiana,” Pepper says.
“These three different types of agaves vary greatly in flavour profile with The Lost Explorer Mezcal Espadin having flavours of red apple, ripe fruits and a mild smokey layer to the finish. The Lost Explorer Mezcal Tobala is an earthy expression with hints of tobacco, cocoa, vanilla and leather. The Lost Explorer Mezcal Salmiana is the most herbaceous expression offering.”
Agalima eases at-home consumption
Brands consistently told National Liquor News that cocktails remain the main way that consumers are enjoying tequila and exploring the potential of all agave spirits. SouthTradeInternational’s Agalima is one brand recognising the importance of this – producing bottled mixers to which the consumer simply adds agave spirit.
“We’ve experienced a great pick up by our national customers as well as independent banners,” said a spokesperson for SouthTrade.
“We have done the batching for you, where making mass cocktails may have previously been difficult, Agalima takes the hassle away and lets you focus on your guests rather than being hidden away mixing complex drinks throughout the party.”
In particular, SouthTrade believes that Agalima offers retailers the opportunity to capitalise on the bundle purchase opportunity.
“Ninety-six per cent of shoppers, when purchasing in a convenience format, are consuming that same day. Having Agalimaas a bundle purchase with tequila takes thepressure off the consumer and adds vital incremental dollars to the retailers basket size,” the spokesperson continued.
“We are seeing tequila go from strength to strength and we know that a margarita mix is the top bundle purchase with a bottle of tequila.”
The premium opportunity
Despite its proliferation, mezcal remains something of a niche category in Australia, especially when compared to premium tequila, which has recorded staggering progress to become the driving force of the category as a whole.
“Premium tequilas [are] dominating the category at 61.5 per cent, and even ultra-premium tequilas are driving higher at 15.6 per cent than standard tequilas,” Pepper says.
And this trend is tipped to continue, with Pepper saying: “From 2021 to 2026, we will see a steady growth year-on-year of 7.6 per cent with super premium, prestige and prestige plus predicted to show the best growth in the category.”
One new addition to the premium tequila segment in Australia is Butterfly Cannon, distributed by Stuart Alexander & Co. The company’s Liquor Marketing Manager, Gemma Eastwood, explains how the colour changing tequila plays in this space.
“Forget shots and sombrero hats, this is very much a luxury lifestyle tequila crafted for mixing in long drinks best enjoyed by the pool bar in a sunset session with friends,” she said.
Hayley Dixon, Spirits Specialist at Proximo Spirits suggests that oak-aged tequilas, another interesting segment of the premium market, can present retailers with crossover success.
“Añejo and extra añejo tequilas are a great opportunity for the category to appeal to whiskey drinkers,” Dixon says.
“One of the most effective ways I find to capitalise on this is through the good old-fashioned liquid on lips.
-Howard Baynie Managing Director Agave Lux
“Our 1800 Añejo is aged in French oak and perfect for dark spirit drinkers that are looking to explore agave spirits, and offering samples is a great way to drive conversion.”
Milne shares this position on this, saying: “Aged tequila offers some of the best value in the market when it comes to aged spirits.
“When you think that it takes six to 10 years for the agave plant to be ready to harvest, then a further 12-24 months ageing in casks, there is serious value in these aged products compared with other categories.”
Mixing it up
RTDs also present retailers with a great opportunity to introduce the category to new drinkers.
Simon Habib, Senior Brand Manager for El Toro Tequila, says that “tequila RTD is a compelling offer.”
“Playing in a heavily saturated market, the compelling consumer attraction is the Mexican origin versus a grain brewed product,” Habib continues.
In particular, the recent expansion of cocktail-based RTDs has opened an opportunity for tequila. El Toro, for example, produces a canned version of ‘ranch water’, a popular Texan highball.
Margaritas remain the cocktail most synonymous with tequila, and brands are playing on this connection too, with Proximo’s Jose Cuervo releasing a Sparkling Margarita RTD towards the end of 2021 followed by a new Watermelon Sparkling Margarita RTD this year.
“By introducing the Jose Cuervo Sparkling Margarita, including our new Watermelon flavour, we are working to build awareness of the versatility of the spirit with Australian drinkers,” says Dixon.
“The Jose Cuervo Sparkling Margarita is full of flavour and refreshing, perfect for summer picnics and BBQs, and perfect for introducing people to the world of tequila.
For Dixon, the RTD also marks a shift in the way that tequila is enjoyed.
“By capturing consumers’ first few drinks of the evening, as opposed to the last few, we can continue to build a positive perception around the agave category.”
This points to the kind of consumer who enjoys tequila too, as Amanda Gonzalez, Brand Manager for SpiritsPlatform (local distributor of Sierra Tequila), explains.
“The tequila consumer comes in all shapes and sizes but they all have one thing in common. They are fun. The tequila occasion is sociable, fun and with friends,” she says.
Australian Agave – ‘a blank canvas’
Recent years have seen the development of a new spirit in the agave arena, made right here in Australia. There’s a consensus amongst the brands that National Liquor News spoke to - the possibilities for this category are almost limitless.
One brand that certainly sees this potential is Act of Treason, the recently named Australian agave project from Top Shelf International.
-Amanda Gonzalez, Brand Manager, Spirits Platform
Trent Fraser, Top Shelf ’s Australian Agave Project President, expresses this clearly.
“We are in a position where we can start with a blank canvas for Australian agave. Our agronomic practises are world-class and not seen anywhere else in the world. This places us in a fortunate position where we can learn and implement the very best of traditional methods, while experimenting and innovating with some Australian ingenuity,” he said
Black Snake Distillery
De Vries, who distils agave spirits at Echuca Distillery, repeats this message, and points to the development of Australian craft distilling.
“Australian agave is in its infancy and is a blank canvas,” De Vries says.
“Craft distilling and the opportunity to visit a distillery near you has been the big growth industry in the last five to 10 years all over Australia. We are a creative bunch and as seen with whisky, gin, and vodka, we love to do our own thing.
“We don’t see agave spirit as tequila or mezcal. We see agave spirit as our agave spirit, and we are not trying to replicate what is currently out there, rather, producing a product that gives the consumer a clear choice in flavour and quality.”
And this point is also reiterated by fellow Narrabri-based Australian agave distillers, Black Snake.
Image by Penny Vella Photography
“Australian agave spirits are adding to the available range of tastes in this area. In some ways these spirits should not be considered as competition but more as an addition to a wonderful drink,” say Black Snake distillers, Stephen Beale and Rosemary Smith.
The pair also had advice for retailers looking to introduce this new spirit to drinkers.
“Personally, at Black Snake, we would try to explain the flavour profile which usually reflects the terroir, climate and uniqueness of our agave,” the distillers said.
This touches on a key factor to the production of Australian agave spirit – whether or not it uses agave grown in Australia, or elsewhere. Act of Treason is made with agave plants grown in Bowen, North Queensland, the latitude of which mirrors the town of Tequila.
“Our agave are thriving at Eden Lassie Farm thanks to the world class agronomy techniques we have in place,” Fraser says.
Act of Treason
“We have been working in partnership with the University of Adelaide to test and track sugar level content and pleasingly we are seeing excellent results. In August we extracted our first large size piña which weighed 10kg and is close to 75 per cent of the way towards our sugar target goal.”
Echuca, on the other hand, imports agave nectar from Mexico and compares this technique to common practices found in other spirit industries.
“The decision for agave spirit producers in Australia is if they should grow and harvest the agave plant or do as we have done and that is to purchase the rich, viscous, slightly smoky blue agave nectar from Mexico and then ferment and distill as we are doing at Echuca Distillery,” De Vries says.
“We see making our agave spirit from the nectar as no different to making rum from molasses and are pleased that this enables us to be able to produce a consistent supply and quality. With our base agave spirit, we can then head in many directions.”
Tequila takeover
It is evident then, that Australia is undergoing a full scale boom in not just traditional tequila, but all kinds of agave, of the kind perhaps only previously seen in the gin renaissance.
What’s more, the category is highly premiumised, with the top end of the market driving growth in the segment. But it’s also a diverse category, as agave spirits of all kinds, as well as RTDs, continue to grow with predicted further gusto to come.
It’s this point that Gonzalez concludes with, noting: “All segments of the tequila category are seeing growth and this is incredibly rare for a category.”
