As we all know, the Tequila is prepared at least with 51% of sugars obtained from the Agave plants, specifically the Tequilana blue agave variety.
In recent years the price for the agave has spike considerably as of today the price per Kilogram is around $21 pesos.
That means that a craft tequila with an efficient process close to the 7.5 Kilos per Liter (55 G.L.) of tequila just for the agave has a COGS of $1,036 MXN ($56 usd) per a 9 lt, of course there are many other costs to add, however what it is interesting is not the costs but that that same agave kilo price used to be at $5 pesos 4 years ago.
It really doesn´t impact that much to the industry, considering craft tequilas are above price and that non craft tequilas are made with the double of efficiency.
The topic today is the relation between agave farmers and distilleries owners. Why they don´t want to sit down and fix a price that is convenient for everybody?
First, revenge, yes, there was a time that agave was so cheap that farmers rather leave the agave plants to rot that to harvest, they did ask for the industrials help but the industrials were taking advantage from this situation and price, that prevented farmers for growing agave again, and in a few years the price was at the other side, then was time to collect for the farmers, it is then now a cyclic situation.
There was a time when both parts were able to sit and talk but big Tequila brands consider this as an entry protection, somebody has said they like this kind of natural cleaning.
This time is different because the consumption will go on, I believe the agave price this year has a way to go up, probably 24 pesos per kilo at the end of the year.
There is also something damaging the farmers also, Brockers, they look like a good option for the farmers but at the end this guys are taking the most of the gain and contributing to the price to increase.
This subject is an important subject you must see, when implementing a Brand or selecting a producer or buying a distillery. For any of these situation contact us, we really can help.
Where is the CRT? why they are so late on providing with exact numbers of Agave fields so producers and agave farmers can plan accordingly?