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Mr. Trump: We need Mexico. Tequila!

Mr. Trump: We need Mexico. Tequila!

The year was 2000, and bartenders were desperate. The announcements heralded a serious crisis in Mexico: the world supply of tequila was about to disappear.

OMG. There was a temporary shortage of blue agave, the pineapple-type plant that gives birth to tequila and many small distilleries closed their doors. The perception of an eminent disaster permitted the large producers (who had their private cache of agave) to raise prices by 20+ percent.

Tequila History

The Aztecs were making a brew called pulque from agave over 1,000 years ago, and the process was refined by the Spaniards; however, the hostility between agave farmers and the distillers continues to this day. Don Pedro Sanchez de Tagle, the Marquis of Altamira, is considered to be the first person to mass produce tequila (1600) and Don Jose Maria Guadalupe de Cuervo (1795) is believed to be the first to receive a license (from King Ferdinand IV of Spain) to make tequila. Don Cenobio Sauza was the first to export tequila to the United States (1873) – shipping 3 barrels to El Paso, Texas. Don Cuervo followed with additional exports. Tequila gained popularity in the United States during WWII, because importing whiskey from Europe became difficult. Tequila exports to the US in 1940 totaled 6000 gallons and increased to 1.2 million gallons by 1945.

Tequila is North America’s first distilled spirit but it can only be produced in the five states of Mexico if it is to be known as tequila: Jalisco, Guanajuato, Michoacan, Nayarit and Tamullipas. In addition, there must be no less than 51 percent Weber blue agave and the higher-end tequilas are made from 100 percent Weber blue agave.

The plant is very fragile and susceptible to fungus, freezes and greed. It can be sold as blanco or plata (unaged or aged up to 2 months); reposado (aged for 2 -12 months); anejo (aged 1-3 years) or extra-anejo (aged more than 3 years). Labeled as joven or gold tequila means that it is unaged but has a yellow hue.

Market Dominance

Most of the Mexican tequila is produced within a 100-mile radius of the town of Tequila in the state of Jalisco. Some producers are small and run by families, while others sport ultra-modern distilleries. There is great pride in tequila production and artisans are frequently hired to create unique hand-blown glass, crystal, ceramic and Talavera pottery bottles that are coveted by collectors.

It is no surprise that international corporations control the largest share of the tequila market. Allied Domecq (UK based; controls Dunkin’ Donuts and Baskin-Robbins), formerly owned Tequila Sauza, the second largest brand; however, it is currently owned by Suntory (Japan). Diageo (UK based; owns Burger King and Guinness), controls 45 percent of Jose Cuervo. American, Canadian and French organizations (Brown-Forman, Seagram and Remy Martin) are also players in the tequila marketplace.

Plant Challenged

The agave plant is very difficult to cultivate as it is attractive to weevils, fungi, bacteria and cold snaps. The plant takes 6-10 years to reach maturity so a single crop loss could set a grower back a decade.

As tequila demand increased in the 1960s, the government of Mexico lowered production standards to allow tequila makers to use sugars other than agave in the process, creating cheap, hangover headaches – leaving the product with a bad reputation.

However, the demand for tequila was energized by Jimmy Buffett (Margaretville), chain Mexican restaurants, frozen margaritas, a fraternity-boy following and relaxed trading rules thanks to NAFTA. As Jose Cuervo and Sauza brands flourished, Patron entered the market in 1989, changing the scene. The company proved that Americans would pay higher prices for prestige bottles of tequila. The result, imports of pure agave tequila have increased with the largest growth in the super premium division. It is so lucrative that George Clooney, Sean Combs and Justin Timberlake have their own brands. Today there are approximately 72 tequila distilleries.

Industry Changes

In 2012, Sauza shifted their entire premium market (Tres Generaciones) to organically certified blue agave. The company is now owned by Fortune Brands (Jim Beam and Knob Creek). Today pesticide free management systems are used and include pheromone-baited traps for the agave weevil and the use of beneficial insects to reduce fungal infections. Patron (Atotonilco El Alto) has developed a composting plant for agave fibers and a reverse osmosis system that repurposes wastewater for irrigation.

The products that are 51 percent agave are used for mixed drinks (Margaritas) and control 40 percent of the market. The majority of tequila demand comes from the export market. In 2013, Mexico exported 76 percent of its total production. One hundred percent tequila is not permitted to be exported in bulk; however, 51 percent tequila is allowed bulk export and bottled in the export destination. Demand for both types continues to increase with China projected to become a $100 million market by 2020.

The United States was the largest importer of tequila until 2012, accounting for approximately 75 percent of the export market for Mexico. Rising demand for the drink is expected to keep the distilleries running at almost 100 percent utilization rates. However, the rising price of the raw material is expected to pose a severe threat to the industry.

Curated Blue Hour (La Hora Azul) Tasting

The Blue Hour refers to the twilight when a blue light accompanies the sun before it rises and sets (perfect times for a few drops of tequila on ice). The suspension between daytime and night time is considered a mysterious and powerful period of time. Neither dark nor light, it is believed that magic spreads through the air like warmth and settles onto the land.

A tumbler of Blue Hour (La Hora Azul) anejo tequila (owned by Don Good Tequila Company, Las Vegas, Nevada), will convert single malt whiskey drinkers to true tequila fans. At a recent Blue Hour tequila event, I had the good fortune to be introduced to what has turned into a true affection for this opulent, sensual, and refreshing taste experience. Blue Hour can be served chilled or un-chilled, with or without ice, but always accompanied by a glass of pure, locally sourced water. Nibbles should include charcuterie, hard cheese, olives, and fruits, raw or roasted almonds.

• Blanco (no barrel aging)

Brilliant, pure and crystal clear to the eye. On the palate, smooth and delicate with suggestions of sweet agave and citrus. The finish is suave, sophisticated and gentle with herb nuances. Pair with fresh mint and citrus in the glass. Cucumber or peach slices will also be pleasant and refreshing.

• Reposado (aged 90 days to 1 year)

Radiantly golden to the eye, with aromatic hints of oak, vanilla and caramel to the palate. The finish is a delicious blend of fruit and caramel. Recommended pairings include chile-laced Mexican chocolate with cinnamon and other spices as well as grapefruit or tangerine segments, pomegranates, and oysters.

• Anejo (aged 12-36 months). Charred in Bourbon barrels to create a smoky smooth taste. Award: 2014 San Francisco World Spirits Competition

• To the eye, deep golden hues. The palate detects smoky oak, nuts, and caramel. The smooth finish boldly delivers a smoky vanilla experience with spicy fruit. Pairing suggestions include smoked cheese, and nuts as well as espresso, Mexican coffee and chocolate truffles. Oranges, dates, tangerines, steak and seafood also provide perfect partners.

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