Mexico Tequila Market Overview, 2028

Tequila is the only spirit in the world that has a protected designation of origin status. This means that it can only be legally produced in specific regions of Mexico, primarily in Jalisco and parts of four other states. The PDO ensures that tequila is made according to strict production standards, using specific varieties of agave and following traditional methods. Tequila is made from the blue agave plant, specifically the Agave tequilana Weber variety. This variety is unique to the tequila-producing regions of Mexico. The blue agave takes around 8-12 years to reach maturity before it can be harvested for tequila production. The soil and climate in these regions contribute to the distinctive flavors and characteristics of tequila. Mexico is the exclusive producer of tequila. The production process involves harvesting the blue agave plant, cooking its core (piña), fermenting the juice, and distilling it to obtain tequila. The tequila production process is strictly regulated by the Mexican government to ensure quality and authenticity. The tequila-making process in Mexico has deep historical and cultural roots. Traditional production methods involve harvesting the agave by hand, roasting the piñas (agave cores) in brick ovens, crushing them with a volcanic stone wheel called a tahona, and fermenting the juice in wooden vats. While modern production methods have been introduced, many distilleries still preserve these traditional techniques, contributing to the uniqueness of Mexican tequila. Tequila has a protected designation of origin (PDO) status, which means it can only be produced in specific regions of Mexico, primarily Jalisco and some parts of the states of Guanajuato, Michoacan, Nayarit, and Tamaulipas. The agave plants from these regions are considered the best for making tequila. One challenge facing the tequila market is the availability of quality agave plants. The growing demand for tequila has led to concerns about a potential shortage of mature agave plants, as they take several years to reach maturity. This has driven up prices and led to efforts to promote sustainable agave cultivation practices. According to the research report "Mexico Tequila Market Overview, 2028," published by Bonafide Research, The Mexico Tequila market was valued at above USD 3.32 Billion in 2022. The tequila market in Mexico has several unique aspects that set it apart from other spirits markets. Here are some notable features are Protected Designation of Origin (PDO, Agave Plant Varieties, Traditional Production Methods, Tahona Wheel, Aging in Oak Barrels, Tequila Tourism, Artisanal and Craft Tequilas. Tequila is categorized into different types based on its aging process. These include Blanco (Silver), Unaged tequila that is bottled immediately after distillation. Reposado, Aged for a minimum of two months but less than a year in oak barrels. Añejo, Aged for a minimum of one year but less than three years in oak barrels. Extra Añejo, Aged for a minimum of three years in oak barrels. However, historically, the most popular type of tequila in Mexico has been Blanco (Silver). Some reasons why Blanco tequila often holds a prominent position in the market. These includes Traditional and Authentic, Mixability, Price Point. Reposado and Añejo tequilas have been gaining popularity in recent years, particularly in the premium and ultra-premium segments, as consumers seek more complex and aged expressions. Craft and artisanal tequilas also offer unique variations and flavor profiles that appeal to specific consumers. The tequila market in Mexico is characterized by a wide range of brands, from large, well-established names to smaller, boutique distilleries. Some popular Mexican tequila brands include Jose Cuervo, Sauza, Patrón, Don Julio, and Herradura, among many others.

In Mexico, the tequila market is subject to various events and government engagement that impact its production, promotion, and regulation. Some notable aspects include Tequila Regulatory Council (CRT), Denomination of Origin, Promotion and Marketing, Tequila Tourism, Cultural Festivals, Sustainability and Agave Conservation, International Trade Agreements. The government's engagement in the tequila market aims to protect the authenticity of tequila, support its cultural significance, boost the industry's economic growth, and promote sustainable practices. Through regulation, promotion, and collaboration with industry stakeholders, the government plays a crucial role in shaping the tequila market in Mexico. In the tequila market in Mexico, a range of tequila categories is consumed, including Value, Premium, High-End Premium, and Super Premium. General overview of tequila consumption in Mexico, Value tequilas are generally more affordable and cater to budget-conscious consumers. They are often consumed for everyday purposes and casual gatherings. Premium tequilas occupy a significant portion of the Mexican market. They offer higher quality and are often made from 100% blue agave. They offer a more refined taste and tend to have smoother profiles compared to value tequilas. High-end premium tequilas are positioned at a higher price point, offering even greater quality and craftsmanship. These tequilas may be aged for longer periods and often showcase more complex flavors and aromas. Super premium tequilas represent the highest tier of quality and exclusivity in the tequila market. They are produced using exceptional agave plants and undergo extensive aging processes. Super premium tequilas may include limited edition releases, single-barrel expressions, and extra añejo tequilas aged for extended periods. In the Mexican tequila market, the distribution of tequila can be categorized into two main channels are off-trade and on-trade. The off-trade distribution channel refers to the retail sector, where tequilas are sold through supermarkets, liquor stores, convenience stores, and online platforms. Consumers can purchase tequilas to enjoy at home or for gifting purposes. This channel allows for wider availability and convenience, catering to a broad range of consumers. The on-trade distribution channel covers establishments where tequila is served for immediate consumption, such as bars, restaurants, clubs, and hotels. Tequila is often featured in cocktail menus and enjoyed by patrons at these establishments. The on-trade channel provides opportunities for consumers to explore different tequila varieties and experience the craft through expertly prepared drinks. Both off-trade and on-trade channels contribute to the availability and accessibility of tequila in the Mexican market, catering to a wide range of consumers and occasions. The tequila market in Mexico has experienced several key trends and opportunities that have shaped its growth and development. Some notable trends and opportunities in the Mexican tequila market are Increasing Global Demand, Premiumization and Craft Tequila, Agave Sustainability and Organic Tequila, Agave Varietal Exploration, Tequila Tourism, Product Diversification, E-commerce and Online Sales. Tequila producers who adapt to these trends and seize the opportunities can position themselves for growth and success in the competitive landscape. Considered in this report • Geography: Mexico • Historic year: 2017 • Base year: 2022 • Estimated year: 2023 • Forecast year: 2028 Aspects covered in this report • Mexico Tequila market with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Type • Blanco • Reposado • Anejo • Others

By Grade • Value • Premium • High - End Premium • Super Premium By Distribution Channel • Off-Trade • On-Trade By off-trade Distribution Channel • Supermarkets and Hypermarkets • Discount Stores • Online Stores • Others By On-trade Distribution Channel • Restaurants and Bars • Liquor Stores • Others The approach of the report: This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and listing out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, annual report of companies, analyzing the government generated reports and databases. After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducted trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers in regional aspects, tier aspects, age group, and gender. Once we have primary data with us. we have started verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to Tequila industry, government bodies and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.