Tequila's price tags keep climbing even as Mexico drowns in extra agave

A bottle of tequila just sold for $35,000 at Sotheby’s. In your local store, a bottle of Casamigos runs about $40. Tequila fans will raise both on July 24 for National Tequila Day, though one of them will require considerably more saving up.

Tequila’s rising price tags trace back to more than clever marketing. What started as a shot-and-lime staple has spent the past several years becoming something people actually sit with, the way they might a scotch or a bourbon. They’re comparing labels the way collectors compare vintages instead of just ordering another round.

Three forces have driven that change over the past several years. People are drinking tequila differently, agave supply has swung from scarce to overwhelming and a handful of major spirits companies are buying up the brands they consider truly distinctive.

Tequila stopped being just a shot

The clearest sign that tequila drinking has changed is who’s buying tequila and why, with its audience now split into two distinct groups. One doesn’t know or care what brand ends up in their margarita, while the other is a growing group of enthusiasts who read up on production methods, follow distilleries online and treat tequila the way some people treat bourbon or craft beer, less a drink than a hobby. That second group is why bottles aged in reposado and anejo styles command some of the category’s highest prices, and why paying well past $100 for a bottle no longer feels unusual the way it once did.

The ‘tequila lake’

A genuinely strange supply story sits behind those price tags, one that originates in the plant itself. Blue Weber agave takes six to eight years to mature, so growers are always betting on demand years in advance, and in the early 2020s, they bet big.

Agave prices have collapsed from a peak of around 30 to 32 Mexican pesos per pound in 2021 to just 2 to 5 pesos per pound today, as all those boom-era plantings matured at once. Cristóbal Casillas Silva, José Cuervo’s director of agriculture operations, says the surplus is so large that roughly three out of every four mature agave plants in Mexico won’t be harvested at all, left unharvested in fields where they’re now drawing pests. It’s a strange kind of problem for an industry drowning in the exact plant it needs, with nowhere for the extra to go.

A shorter list of ‘serious’ brands

While all that plays out in the fields, the corporate side of tequila has been consolidating around fewer, bigger bets. Bacardi paid $5.1 billion for Patrón in 2018, the clearest sign yet that super-premium tequila had become a core business rather than a side project.

Pernod Ricard followed in 2022, taking a majority stake in Código 1530, the ultra-premium brand co-founded by George Strait, adding it to a portfolio that already included Avión and Olmeca. Even Jose Cuervo’s parent company, Becle, has posted weaker results of its own, reporting a sharp drop in first-quarter profit this year amid a distributor transition and a tougher competitive field.

Not every brand reaches “serious” status by getting bought, though. Clase Azul has stayed independent and family owned, and its Día de Muertos bottle is the one that just drove this year’s record-breaking bid at Sotheby’s, with rarity, provenance and storytelling separating that $35,000 bottle from a $40 one. It’s proof that a brand doesn’t need to sell out to earn a spot on the shorter list.

That’s the real arc of tequila right now: a plant that takes most of a decade to grow and a glut nobody quite planned for. At the same time, the industry is increasingly rewarding a smaller group of bottles people are willing to savor, whether they got there through a buyout or by staying exactly as they are.

Jennifer Allen is a retired professional chef and long-time writer. Her work appears in dozens of publications, including MSN, Yahoo, The Washington Post and The Seattle Times. These days, she’s busy in the kitchen developing recipes and traveling the world, and you can find all her best creations at Cook What You Love.

The post Tequila’s price tags keep climbing even as Mexico drowns in extra agave appeared first on Food Drink Life.