The Business of Agave Distillates: Does Multinational Takeover and Celebrity Incursion Spell Mezcal’s Downfall?

A Note From The Editor

What you are about to embark on is an educational opinion piece through the lens of Alvin Starkman. With his depth of knowledge, first hand experience, and educational background we think that you will find his writing very intriguing. 

In this article, Alvin discusses celebrity mezcal brands and their impact, as well as the future outlook for the mezcal industry. 

In August of 2022, I had the pleasure to accompany him on his Oaxacan Mezcal Tour. That day was very eye-opening for me to say the least.

Without being redundant to the below piece, I would like to add that it is important to find brands that give back to the producer and/ or the community. The trouble is that not all celebrity brands declare their special arrangements with the producers or the incredible ways they give back to the community.

The only way to really know what is going on is to go to Oaxaca yourself and do boots on the ground research. You may not always know who is doing the GOOD, but you will quickly find out who is doing the BAD.

Even though there is a "mezcal boom" you will likely not find many producers getting rich from the affair. However, I do feel that the general standard of living is going up which is a very good thing. Families are now able to support themselves and send a daughter or two to college and things of that nature. 

As far as celebrity brands are concerned, I still do maintain the position that rising tides lifts all boats. The market for these spirits may not be you or I, but there is a market and they benefit the industry as a whole. 

Sincerely,

Greg Rutkowski, President
Mezcal For Life

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The Business of Agave Distillates: Does Multinational Takeover and Celebrity Incursion Spell Mezcal’s Downfall?

Alvin Starkman, M.A., J.D.

The mezcal industry will continue to thrive throughout the coming decades. And it will likely continue to explode exponentially in the short term. While we don’t have the margarita, which contributed to where tequila is today, there is a plethora of mezcal cocktails helping along the agave distillate. Some believe that cocktails, as well as the likes of Bacardi, Diageo, Constellation Brands, Pernod Ricard and others, will spell its downfall. I don’t buy into the gloom and doom. However there is merit in the viewpoint that as the years progress, we will be moving towards a two tier system; the inexpensive predominantly espadín agave distillate used for both cocktails and as a means by which the non-aficionado consumer can illustrate his trendiness, and, the $90 - $300 USD a bottle drinker. The latter will gravitate to higher end products such as many of the mezcals distilled in clay, and those produced from species typically characterized as having a low carbohydrate content (dictating lofty pricing beginning with the producer and ending at the retail level).  And so those who want to keep mezcal as their own secret society, will get their wish; but it will cost them.

The trend began a few years ago when Pernod Ricard purchased a majority interest in Del Maguey. Many of the mainly American mezcal geeks swore they would never again drink the brand, and even some bar owners resolved to no longer stock Del Maguey. At the time I foreshadowed that they would come around over time, since, I thought, other popular quality brands would follow suit. If not, I thought, there would be nothing left to drink. 

I was right about other brands following suit. Look what happened to Ilegal and Pierde Almas, and others. Have people stopped drinking them? No. One industry insider recently published a diagram, a flow chart of sorts, illustrating which large corporations now control which brands, apparently in an effort to dissuade consumers from drinking those brands if there are quality alternatives available. 

More recently the chatter has been about celebrity incursion into the industry, I suppose because the naysayers recognize they have lost the battle against big corporate business. And once again, their objections are ill-founded, at least to the extent that they (wrongly) assume that all movie stars and sports figures are only in it for the money and just want to rape the Mexican countryside of capital and keep as much of it as possible for themselves. Yes, there are bad players. But they extend beyond the celebrity class, to some among us. Let’s not even get into the cultural appropriation discussion. However, just because a Mexican mezcal brand owner has brown skin does not mean he is any better or worse than the Jenners or the Clooneys of the world. And his motivation might be the same as a publicly traded multinational the first obligation of which is to shareholders. 

If we readily acknowledge capitalism at its extreme, insofar as it relates to corporate and celebrity greed, and assume that there is still altruism in our society, all will not be lost in the mezcal industry.  And this holds true for those who want to keep mezcal, and other Mexican agave distillates for that matter, out of the mainstream for their own “greedy” purposes. There is room for both the geeks, as well as the cocktail crowd and working class social climbers. At the same time the economic lot of those who continue to struggle in the villages where mezcal is made and sold, will get a dearly needed financial boost. 

Some corporate interests recognize that “green,” “organic” and “natural” sells, and promoting such touchy-feely concepts will indeed improve their bottom lines since consumers will gravitate to other products their affiliated companies produce. This means that they will resist mezcal industrialization and make best efforts to ensure that mezcal means of production and tools of the trade remain as they did prior to the corporate takeover. So their motivation might be financial, but maintaining that traditional status quo might serve their purposes. And, they might actually want to “do the right thing.” They might include a line of premium agave distillates in their portfolios for a particular type of consumer, be they tree huggers or secret society mezcal geeks. 

When we turn to the celebrity class, as suggested, not all are created equally. While I have not been authorized to disclose names at this time, I can confirm that there are those who have actually partnered with their distillers, meaning as the stars increase their incomes, so do their palenquero business associates. One celebrity brand actually built and paid for a water filtration plant, not only for its distiller, but rather for the entire town. Now many might object to an espadín at 40% ABV which sells for $60 USD for 750 ml. But if the distiller as well benefits from the higher-it-should-be price, that’s a good thing. The geeks can simply not drink it. The pedestrian consumer might like 40%. And he might find something at $35 USD to his liking.  

Over the past several years production and sale of mezcal has increased dramatically, in part because of multinationals who have a global reach which Del Maguey, Pierde Almas, Ilegal, Vago and other quality brands did not have prior to associating with the big boys. And celebrity brands such as Dos Hombres have attracted new agave distillate drinkers who prior to folks like Cranston and Paul getting into the business, didn’t even know what mezcal was. It’s just a matter of striking a balance; continuing to produce more and more mezcal to benefit the hardworking producers in Mexican villages, and maintaining that same quality which has been traditionally produced for generations. And, at the same time producing a mezcal which perhaps doesn’t have the ABV the geeks want, but then again sells for an extremely approachable price.

Alvin Starkman operates Mezcal Educational Excursions of Oaxaca (mezcaleducationaltours.com). He is the author of Mezcal in the Global Spirits Market: Unrivaled Complexity, Innumerable Nuances (Third Expanded Edition with Portraits), all illustrations by professional photographer Spike Mafford.

If you are interested in learning more about mezcal? Check out our other mezcal articles.