Mezcal Witnesses Surge in Popularity among a Rising Number of Alcohol Consumers Worldwide
An umbrella term for a variety of agave-based liquors, mezcal definitely stands out from conventional hard spirits in terms of ageing of the source rather than that of the beverage. The age of agave plant decides the quality of mezcal, which is why the ageing part during the mezcal production is often given an afterthought by even the finest of mezcal producers. While the number of consumers inclining towards boozing has been constantly on the rise worldwide, the alcohol industry is also exhibiting its diversity in response to the evolving consumer preferences. One of the notable beneficiaries of this is the global mezcal market. The rich diversity that mezcal offers as a globally mushrooming market continues to attract spirits connoisseurs worldwide.
Though represents an infant market currently, this distant cousin beverage of tequila has been recently garnering greater popularity over tequila. In 2019, mezcal consumption saw a solid 40% rise in the US alone against that of tequila, around 9.4%, suggests The Spirits Business. While 2020 was the time for survival, mezcal managed to see a hike in production, as well as sales even on the face of pandemic, and lockdowns. The stupendous growth of ecommerce retail remains the mainstay of the mezcal market growth through 2020. Mezcal can be prepared by using around 30 different agave varieties, and espadín remains the most sought-after one that contributes almost 90% share to mezcal. Moreover, preference for 100% agave will continue to be higher over that for agave blends. Apart from the ageing of agave plants, the ageing of mezcal blends plays a crucial role in building consumer preferences for mezcal. Añejo is the most aged of all variants, followed by Reposado or añejado, and the lesser aged white mezcal, and golden mezcal.
Favourable Growth Prospects for Mezcal as Luxury Beverages Win Preference
Besides consumer behaviour, shifting demand patterns, and ingredient preferences, the progress of the mezcal market will remain majorly influenced by evolving beverages sector, dynamically transforming HoReCa culture (hotel, restaurant, and café), and growing participation of the retail industry. Mezcal is expected to particularly benefit as the trend of premiumisation firms up. With luxury beverages successfully carving out their niche in industry, atypical drinks like mezcal will most likely penetrate newer drinker communities. The wealthy consumer class is always keen on reaching beyond the conventional while enjoying the leisure of life. Such consumers pay a premium to surpass the established spirit categories, and explore innovative niches with a much higher production value. Mezcal is increasingly being marketed as a novel luxury beverage against standard spirits, which is projected to remain the key factor driving a measurable mass of luxury beverage consumers to raise frequency of mezcal consumption. The expanding cocktail culture will also act as a major booster to the mezcal market growth. Popularising F&B trends like organic, natural, functional, and on-the-go also remain among the other contributors to market growth.
Retail Expansion Holds Promise to Open up Ample Opportunities
Besides the HoReCa segment that also includes pubs, clubs, and bars, the mezcal market is expected to reap benefits from another highly remunerative sales channel - retail industry. Following the mainstream alcohol space, mezcal brands are also eyeing the world of retail for its exceptional potential to support sales of alcoholic beverages. Rapid progress of modern retail formats is projected to unlock more than a handful of windows of opportunities for mezcal producers. Online retail, on the other hand, has been playing out as a high-impact factor for mezcal sales. While global B2B wholesale behemoths like Walmart have secured their space along the beverages supply chain reaching HoReCa, ecommerce giants like Amazon are also creating multiple lucrative opportunities for beverage brands from across the globe. Consumers in a few of the most progressive urban markets like New York, Los Angeles, San Francisco, Chicago, and Austin are already purchasing mezcal for quite a while now. Retail sales of mezcal made an early headway in these areas, and the prime reason behind this is the consumers here willing to explore smaller portions of newer mezcal varieties. Apart from bottled mezcal selling out at independent retail stores, and boutiques, the fondness for cocktails drives mezcal markets here.
The West Boasts of Having Top Mezcal Markets; China Emerges Bullish
The US, being the leading mezcal consuming country in the world, accounts for the continued dominance of North America in the global market. Looking at the upsurge in mezcal popularity, and strong presence of producing brands, as well as end-use sectors in the US, many beverage groups, and individual companies are likely to plan investments in mezcal production plants across the country. The US will maintain its lead throughout the forecast period on the back of a large number of mezcal breweries with a solid market foothold, especially in terms of product innovation. The overall import-export scenario is likely to remain impressive. Mexico, the traditional hub of both agave cultivation, and mezcal production, is projected to secure the second position in the global mezcal market. While the country has managed to keep its steep growth trajectory intact over the recent past, it can be clearly seen that the growing mezcal appetite of the US, the UK, and other key consumer nations will work to the advantage of the Mexican market. With the dramatically rising number of craft breweries, and distilleries, craft spirits are also projected to represent a lucrative investment pocket for mezcal producers. Mezcal’s craft beer blend that has been a prominent trend in North America, and Mexico further favours the market growth in future.
The UK also is an important market for mezcal brands along with the US, France, Greece, Australia, China, and certainly, Mexico. Sales in the UK have been soaring as mezcal adopts a shift from niche to mainstream spirits category. China, on the other side, is developing a strong market for mezcal producers banking on the fact that a sizeable millennial population in the country prefers tequila over other drinks, and that a greater number of urban places ramping up their mezcal sales to lure this particular demographic. The Chinese market for spirits, though continues to see the dominance of single-malts, mezcal has come up as a potential substitute with similar characteristics. One of the key beer and tequila consuming countries Brazil has been experiencing the slow, and steady growth of mezcal. With a prospering investment scene in the category, mezcal market is anticipated to discover multiple lucrative opportunities in Brazil over long term.
Mezcal Production Demands a Firm Regulatory Grip, and Reliable Certification Bodies
There are definitive rules set for the distinct processes that are to be undertaken for the three mezcal categories – mezcal, artisanal mezcal, and ancestral mezcal. However, there are no specific regulatory standards regarding mezcal production in Oaxaca (Mexico), and that in other states. The market still needs a definitive regulatory framework as it shows strong indications of rapid, multi-faceted growth in the near future. Moreover, it becomes imperative to look at how the mezcal certification is changing. Since decades, the Consejo Regulador del Mezcal (CRM) has been the sole arbitrator for mezcal industry that was supposedly formed in 1997 to enforce the official mezcal production standards set by Mexico’s Norma Oficial Mexicana (NOM). However, recently in March, 2021, CRM legally lost its monopoly over mezcal certifications due to its own dissatisfactory performance, and unyielding hold on certifications meant for genuine producing brands in industry. The market now has multiple active entities authorised for mezcal certifications. The viability of the solution however still remains to be seen.
Mezcal Market Competition
Del Maguey was officially the first mezcal brand that went global. Today, a fairly fragmented landscape, the mezcal market represents decent competition compared to the mainstream spirits markets. Some of the key companies active in the global mezcal market space include Ilegal Mezcal, Pernod Ricard, El Silencio Holdings INC., Rey Campero, William Grant & Sons Ltd., Craft Distillers, Mezcal Vago, Mezcal Amores, Wahaka, Los Danzantes, and Mezcalgulroo.
While strategic acquisitions of smaller producers continue to be the preferred move of leading market players, several small-scale liquor manufacturers are likely to enter partnerships with larger players with an aim to penetrate newer markets, ensuring a better footprint in the mezcal market. A number of manufacturing brands in traditional spirits markets are also debuting the mezcal space recently, which points to the flourishing competition structure of the global mezcal market over the forecast period. A steady stream of innovative product launches, as well as new brand introductions in the market reflect myriads of remunerative opportunities brewing up over the horizon. On the contrary, mezcal producers will also invest effort in tapping into the mainstream spirits market.
Recent Developments in Mezcal Landscape
Key Elements Included In The Study: Global Mezcal Market
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