Sarah Jarosz spotlights exploration and letting go of inhibitions in her music “Mezcal and Lime” when she sings, “You go to my head/Like a summer season night time/Intoxicate me/Like mezcal and lime.” Primarily based on market efficiency, shoppers are exhibiting their curiosity in exploring Mexican-based spirits like mezcal and tequila.
Earlier this 12 months, the Distilled Spirits Council (DISCUS) launched its Annual Financial Briefing, which confirmed that in 2024 tequila/mezcal gross sales have been up 2.9% totaling $6.7 billion.
Brian Sudano, CEO at S&D Insights LLC, Norwalk, Conn., notes that the general spirits class declined in 2024 when it comes to greenback gross sales, however quantity was up barely, crediting ready-to-drink (RTD) spirit choices.
“Inside this context, tequila/mezcal quantity declined barely whereas {dollars} superior at low single digits,” he says.
Though quantity for the tequila and mezcal section receded, the uptick in greenback gross sales might be attributed to shoppers curiosity in premium spirits.
“Tequila/mezcal is a premium class within the U.S. with common worth factors above different classes,” Sudano says. “In consequence, the premium motion has supported the general class progress. Inside the section, the excessive finish continues to drive efficiency; nevertheless, the efficiency hole has moderated just lately.”
Abe Lichy, co-founder and CEO of Mezcalum, New York, additionally calls consideration to the affect premiumization is having on the tequila and mezcal market.
“Premiumization is driving tequila and mezcal to new heights,” he says. “Customers need authenticity, craftsmanship, and distinctive taste profiles — particularly within the ultra-premium tier.”
Lichy notes that tequila, notably within the premium and ultra-premium area, continues to indicate dominance, but additionally highlights the rising affect of mezcal.
“Mezcal is surging, with double-digit progress as extra shoppers uncover its depth and complexity,” he says.
Additionally enjoying a job in mezcal and tequila’s recognition is their enchantment to multi-cultural shoppers.
“Tequila and mezcal aren’t simply spirits — they’re cultural touchpoints,” Lichy says. “Youthful, multi-cultural shoppers are shaping the market, pushing demand for extra genuine, high-quality agave spirits.”
S&D Insights’ Sudano provides that though tequila and mezcal enchantment to multi-cultural shoppers, they’ve resonated normally with authorized ingesting age shoppers.
“Tequila/mezcal over index to Hispanics, however on the similar time has made great inroads into the final market, which has supported a lot of its out efficiency in spirits over the previous 10 years,” he says.
The curiosity in mezcal and tequila additionally has impacted the on-premise channel.
“Twists on common cocktails utilizing tequila/mezcal versus different spirit sorts have gotten extra available,” Sudano says. “This contains Previous Fashions and Negroni’s [and] different new cocktails resembling Disco Picante (it contains mezcal, blue cuacao, lime juice, agave syrup and spice liquor).”
Mezcalum’s Lichy additionally highlights the elevation that cocktails with tequila and mezcal have skilled in recent times.
“Tequila and mezcal aren’t only for Margaritas anymore,” he says. “Bartenders are utilizing them in
daring, artistic cocktails, making them menu staples from dive bars to Michelin-starred eating places.”
Given the recognition of those spirits, the market is also seeing extra entrants within the dialog.
“With extra entrants available in the market, differentiation is essential,” Lichy says. “For tequila, meaning standing out in a crowded area. For mezcal, it’s about defending authenticity whereas scaling well. Mezcalum is properly positioned in its enchantment to each the female and male demographic.”
S&D Insights’ Sudano, in the meantime, notes that the innovation helps to develop the class, however provides that customers can turn into perplexed as choices develop.
“Tequila/mezcal is approaching vodka to be the biggest section inside U.S. spirits,” he says. “Innovation will proceed to play a job within the class so long as it continues to realize market share. Nevertheless, too many new entrants muddle the cabinets and can create client confusion. As new entrants have expanded, it has put strain on the general class.”
Subsequent steps
As tequila and mezcal has showcased their enchantment to the U.S. market, issues stay following President Donald J. Trump deliberate implementation of tariffs on items from Canada and Mexico beneath the Worldwide Emergency Financial Powers Act (IEEPA). As of press time, the 25% import responsibility had been delayed till April on imports from Mexico and Canada that adjust to the U.S.-Canada-Mexico Settlement (USMCA). Spirits produced in Canada, Mexico and america are all lined beneath USMCA.
“The American client is already feeling the pinch from a slowing financial system and rising costs over the previous a number of years,” S&D Insights’ Sudano says. “The tariffs will have an effect on pricing whether it is maintained for a sustained time period. As tequila/mezcal is a high-priced section to begin, the affect will probably be just a little extra reasonable than will probably be on Canadian whisky, however it is going to probably reasonable demand within the brief time period.”
Mezcalum’s Lichy additional particulars that manufacturers within the premium tiers might be higher positioned than worth manufacturers to navigate the tariffs.
“Tariffs on Mexican imports may imply greater costs for tequila and mezcal,” he says. “Premium manufacturers could climate it, however worth and mid-tier segments will really feel the squeeze. Given Mezcalum’s nimble positioning and proactive steps taken to mitigate margin hits, tariffs may give Mezcalum a aggressive benefit in comparison with the bigger gamers in agave.”
If tariffs stay in place for an prolonged interval, S&D Insights’ Sudano anticipates it is going to have an effect on 2025 efficiency for tequila and mezcal.
“Spirits general proceed to be beneath strain particularly from RTD options,” Sudano says. “If the financial system slips right into a recession and tariffs stay in place from awhile, it’s probably that tequila/mezcal will probably decline in 2025. Whatever the size of any tariffs, we see tequila/mezcal being flat to down barely in {dollars} and quantity down within the low single digits in 2025.”
Regardless of this variable, there’s no denying that customers have a thirst for Mexican-based spirits.
“Mezcal’s second is right here,” Mezcalum’s Lichy says. “Extra consciousness, extra cocktails, and extra progress — particularly in high-end bars and retail. The important thing? Retaining the class genuine whereas increasing its attain.”
