Americans' thirst for 'super premium' tequila is unquenchable

Credit: David Foster

Jalisco, Mexico — “I like funkiness in my tequila,” said Jose “Pepe” Hermosillo, the founder and maestro tequilero (master distiller) of Casa Noble, a renowned boutique organic distillery cradled in the birthplace of the mythical elixir derived from blue agave. Inside Hermosillo’s open-air tasting room, he’s pouring tastings of his two most prized collectors’ editions of aged extra añejos.

Much as he prefers fuller red wines, Hermosillo likes his tequilas to have similar “funkiness, mushroominess, earthiness.” Guests at the tasting room are instructed on how to approach the 2016 vintage. “Kiss the tequila,” said David Yan, global brand ambassador for the distillery. “Wet your lips… Breathe deeply.”

You may as well go ahead and French kiss this tequila, the Colección del Fundador Volume I from 2016, listed for $1,200 a bottle, and make love to the other — the Fundador Volume II released last year — which costs $1,499 a bottle. (Only 300 bottles of the Fundador Volume II were produced after the tequila was aged in French white oak barrels for eight years; made with the first agave ever planted for Casa Noble in 1997.)

The sky-high prices underscore Americans’ newfound love affair with top-tier, luxury tequila, all the while with President Donald Trump hurling personal insults at Mexicans and threatening to build a border wall and blow up trade.

According to the Distilled Spirits Council of the U.S., “super premium” category tequila volumes in the U.S. rose 71% in 2017 over the past five years — and exploded 805% over the past 15 years. Overall, tequila volumes in the U.S. (from “value” to “super premium” category ) grew 140%, an average annual rate of 6%, since 2002, and in 2017 17.2 million 9-liter cases were sold. U.S. supplier revenue for tequila (all categories from “value” to “super premium”) rose 45%, from $1.9 billion to $2.7 billion, between 2012 and 2017, while total spirits grew just over 4% during the same time period.

Tequila may be the bridge over troubled water between the United States and Mexico. The U.S. government formally recognizes tequila as a denomination of origin, therefore it is protected. The U.S. is not allowed to permit the sale of tequila unless it is produced in certified regions of Mexico.

Hermosillo’s labor of love has been a successful seduction for him personally, as it has for other big-name brands. Seventeen years after he started his tequila business at age 29, with just $3,000, Hermosillo sold the Casa Noble brand in 2014—with the help of his celebrity rock star fan Carlos Santana who became a part owner—to the Fortune 500 alcoholic beverage company Constellation for a reported figure shy of $30 million.

Star-studded billion-dollar tequila deals

The sale was a precursor to much bigger deals, glamorized by Hollywood, to come. In June 2017, George Clooney proved that celebrity status has cache when he sold his five-year-old tequila, Casamigos, to global spirits conglomerate Diageo for $1 billion. (The brand hadn’t even been around long enough to see an agave plant fully mature.) And just this week Bacardi, the world’s largest private sprits company, finalized its acquisition of Patrón in a deal valuing the tequila brand at $5.1 billion.

These deals come on the heels of short supply and high demand from gringos who have evolved from salt-and-lime shots. Amid a worrisome shortage of blue agave, the particular plant species required for making pure tequila, distilleries are honing their efforts where the real growth is—in top-tier, handcrafted brands such as Hermosillo’s, which clearly people are willing to pay top dollar for.

Jimadors harvesting agave at La Alteña distillery in Jalisco. Jimadors uses a coa, a round blade attached to 5-foot long handle, to shear the plants’ sword-like leaves to reveal large piñas, or cores, which are then split and cooked in ovens for up to 72 hours. [Photo: May Ann Akers]

While Cinco de Mayo revelers need not fear (margaritas for casual enthusiasts aren’t going anywhere), connoisseurs may see the price of their favorite extra añejos, cristalinos and jovens go up; and they certainly will for limited editions and collectors’ bottles, which, if you can find them, go for anywhere from a few hundred to several thousand dollars. (There’s even one bottle, made by Clase Azul, that costs $30,000.)

Tequila producers are taking first-class routes to quench Americans’ taste for sipping tequilas. With more competition concentrated in the highest echelons, tequila makers seem eager to promote a special product or collaboration that distinguishes them in the “super-premium” category.

Fancy tequila tastings

Industry leaders are looking to bring more top-flight customers into the fold by further educating them and turning them on to the really good, high-end stuff. They’re extending invitations to loyal customers to visit Jalisco and tour their distilleries to see firsthand the painstaking process involved in turning agave into tequila — from harvesting the beastly spiked agave plants, shearing their sword-like shoots, baking the agave piñas, or cores, then crushing, juicing, fermenting and distilling, sometimes three times.

This summer, Patrón plans a very limited re-release of the Patrón x Guillermo del Toro collectors’ bottles—$399 each—produced last year with the academy award-winning director who grew up in Jalisco.

This historic distillery produced Herradura tequila from 1870 to 1963, when the facility’s modern operation was built next door. The words “En Dios Confiamos” emblazoned on the wall where workers once toiled to ferment and distill tequila mean “In God We Trust.” [Photo: Mary Ann Akers]

Herradura, which was the first 100% agave tequila sold in the United States, partially perhaps thanks to Bing Crosby and fellow entertainer Phil Harris, has a buy-the-barrel program. Former Dallas Cowboys star Emmitt Smith kicked off the Brown-Forman-owned distillery’s program in 2010. Herradura offers its fans the chance to buy a personalized barrel of either reposado or añejo for $11,000 to $14,000. One barrel holds enough to fill 240 bottles, from $46 to $58 each. Plus, the tequila maker will treat you to a private, behind-the-scenes tour of the historic hacienda in the town of Amatitán in the outskirts of Guadalajara—the only remaining tequila hacienda in Mexico, or the world for that matter.

Ruben Aceves Vidrio, global brand ambassador for Herradura, said customers who buy a barrel spend time in Casa Herradura’s barrel room tasting samples of “three beautiful but different” barrels of the same expression of reposado or añejo because barrels of the same expression can have subtle differences. “Choose the one you like best” and the barrel is all yours, he said.

As luxury begets luxury, the lure of producing fine tequila in the volcanic rich terroir of Jalisco drew Moet Hennessy to open a distillery here last year, launching Volcan De Mi Tierra tequila.

And there are throwbacks, like Carlos Camarena, a respected, third-generation owner of his family’s La Alteña distillery. His vision for success is to protect the agave fields he owns and not harvest any of it before it’s mature enough to make good tequila, which takes an average of eight to 12 years.

“I don’t have to be the richest guy at the cemetery,” said Camarena.

Mary Ann Akers is a freelance writer living in Washington, DC.