A few years ago we created a shirt that said “Mezcal is the new mezcal” because it felt like we were in the midst of a whip saw moment. People were once again rediscovering mezcal, all those “tequila’s smokey cousin” references were popping up, and it felt like we were reliving recent history. Fast forward a few years and it’s clear that we are in a very new era for mezcal so it’s high time that someone tried a modest recent history of our favorite spirit.
Where are we now?
Mezcal has never been so available, arguably of such consistently high quality, and giving back more to the people that produce it. On the other hand, it and everything having to do with it is being radically transformed: That includes the farmers, distillers, the communities that surround them, the business people investing in them, and us the, largely, international consumers.
For a while there Susan and I were worried that we were just sitting on a mezcal bubble defined by rivers of lower cost mezcal made from water logged agave hearts fit only for cocktails. Today it’s obvious that something much more complex is going on. In order to understand what that is, it always helps to step back a bit so here’s a quick history of mezcal north of the border. I’ll get to mezcal’s history in Mexico later, perhaps never, but I’m always working on that project. For now, let’s just concentrate on the known knowns.
We appear to be in the fourth era of mezcal. What? You say that there have been four eras of mezcal? There have been at least that many, probably more, especially in the early days. Here’s a shot at a loose history to try and add some perspective to our moment.
The original era
Mezcal has a notoriously cloudy origin. The few things we know for sure are that distilling technology definitely arrived in the wake of the Spanish conquest, it spread quickly across Mexico, and made mezcal very popular.
Some amazing research has and continues to be done in this area so I have great hope that we’ll know much more about key questions like whether mezcal was a pre-Columbian beverage, how tequila emerged, and the development of small underground distillers. Researchers like Ana Valenzuela-Zapata, Ted Genoways, and Patricia Colunga continue to do amazing work, and that’s just the tip of the iceberg. With any luck the work being done by researchers like them and many others will create a fuller history of mezcal over time.
The 20th Century
Mezcal was transformed by three major events in the 20th Century:
- The Mexican Revolution tore through the country and, in one of those polite terms that obscures an unbelievable amount of human suffering, disrupted the entire industry.
- Prohibition in the US created a booming demand for a decade.
- Soon thereafter all the rationing from WWII brought that market back to the US.
The booms didn’t last for long, brown spirits bounced back after the war as did the clear spirits like gin and vodka which really defined the post war cocktail era. It seems that inspired marketing prompted some mezcal makers to add worms to their bottles in order to distinguish it from everything else.
But the damage was done. The worm in the mezcal bottle became a key component in its identity and, for whatever reason, everyone kept putting the gusano in the bottle and pretending that was the only thing called mezcal. North Americans loved this gimmick when they were on spring break, they even brought bottles home with them which languished on bars until a fateful move or teenage rager. But the worm didn’t do anything to develop a sustainable industry.
The “first” artisanal mezcal
Enter Ron Cooper who, with the launch of Del Maguey in 1995, commercially brought artisanal mezcal to the United States and, eventually, the world. Inspired by all the great agave spirits he tasted while traveling in Oaxaca he crafted a brand around the idea of single village mezcals, that is, a mezcal that represented the unique flavors in each culturally or historically defined appellation in Oaxaca like Santa Caterina Minas.
As Cooper tells it, “this was a 21 year, overnight, success,” because he spent decades selling Del Maguey bottles before he really encountered success. It’s not like other people weren’t trying, Encantado’s story is at least one, there may be many others. In the interim era of the late nineties/early aughts you would have been hard pressed to find mezcal in most bars, let alone Mexican drinking establishments. Tequila was still the representative spirit of Mexico. Only a few places stocked Del Maguey, usually because their owners fell in love with it and hit it off with Ron Cooper on one of his personal sales crusades. Other mezcals emerged in this era, among them Scorpion, but it was slow going for them as well.
Meanwhile in Mexico mezcal had been going through its own evolution. It boomed in the early 90’s only to overproduce and force many of the people who were developing brands out of the business. One producer from this period recounted how his family had mezcal stored in every available container in every corner of their house to the point that they’d constantly stub their toes or fall over garafones in the kitchen when they needed to get a glass of water at night.
That’s just one snapshot of what was happening in mezcal across Mexico, there are so many stories, I hear new ones with every person and place that I visit. But the common picture is that mezcal was in neutral. People were still producing small amounts seasonally. Villages would bring it out for festivals. Families for weddings. Aficionados would drive out to rural distilleries and buy a year’s supply. It all sounds so simple.
The second artisanal mezcal
Roughly starting in 2005 or 2006 small brands started popping up. The model in this era was tequila so many brands created three labels; a blanco, a reposado, and an anejo. A fair number of these brands had a vanity feel to them, a few rich guys from DF setting up a little business and seeing if it would go. No discredit to them but this is a tough, low margin, business so that vanity idea is great if you’re not overly interested in the business side. To borrow a saying from the wine business, “how do you make a small fortune? You start with a large one and then open a winery.”
But they were onto something. The artisanal food movement was blooming which meant that people were looking for spirits with soul, ideally sustainable souls, but a good tasting bottle with a story was the start of something bigger. Tequilas like Fortaleza fit this role well and jumped into the space aggressively. Bartender trips to Fortaleza’s distillery from the era are legendary. A few bartenders continued on to Oaxaca where they found a culinary and distilling culture that really knocked their socks off for its originality and complete absence of corporate artifice. This really struck a chord, the stories started circulating, the demand for bottles started. Del Maguey was right there ready to fulfill.
The simple mystery of this era is why more mezcal labels didn’t survive. There were plenty of great quality. But, if you look around at any liquor store or bar today Del Maguey is probably the only label which existed before 2010. What happened to all those brands that popped up in the early aughts? First, the business was still immature. Few bars stocked mezcal, few mezcals had decent distribution, few people asked for it. The people starting mezcal labels probably didn’t grasp how difficult it would be to become successful. That’s not to fault them, talk to most successful business people and, if they’re honest, they’ll tell you that they would never have gotten into the business if they had realized how difficult it would be.
The third artisanal mezcal wave: Silvestres, families, and cocktails
This is where things get hot and probably bring us up to the current day. Starting around 2010 a lot of factors suddenly converged. That incipient market of Del Maguey drinkers, artisanal spirit drinkers, and tourists to Oaxaca grew quite a bit. And they wanted more variety.
Families who had long standing mezcal businesses like Asis Cortes of El Jolgorio/Mezcal Cortes or newbies who dedicated themselves to creating a new business model like Judah Kuper of Mezcal Vago started building something bigger. This new wave melded youthful faces who had experience in the North American market with traditional production practices. And they understood sustainability.
This meant that they approached the business differently. Instead of appropriating tequila’s barrel age model, this group melded the traditions of mezcal varieties with North American tastes. I don’t know if they understood exactly how well calling out an agave variety would match an audience’s hunger for wines defined by grape names, but it was a true meeting of sensibilities.
And all these producers understood that sustainable farming practices would be integral to their businesses: In order to ensure that they could sell mezcal for decades to come, they had to plant tons of it annually. Their farming practices adjusted accordingly. They also had to figure out how to cultivate agaves that were traditionally harvested wild because demand for these rarer varieties was so high that the natural stocks were being depleted. Without a dependable pipeline for the future they would just be producing one offs. And they figured out that talking about these great sustainable practices was also a, if not the, major marketing pitch for many in the United States, the UK, and elsewhere schooled in the need for sustainable farming.
I’m not sure when to date this transformation but it certainly feels like Vago’s emergence in the fall of 2013 is as good a point as any. One day Judah Kuper arrived in California with an entire line of artisanal mezcals for sale. They were all fantastic and all spoke for a certain component of mezcal: He had an elote instead of a pechuga, a classic espadin at the heart of everything, an excellent ensemble for that end of the spectrum, then a passel of silvestres.
Almost as importantly, those bottles suddenly appeared everywhere and were reasonably priced. If that’s not market validation, I don’t know what is. Plus these were all sustainably produced and he was dedicated to continuing that course. At the time I was completely taken by surprise by this development because few of the producers we’d been seeing were focused on cultivation or sustainability. Judah was a huge proponent of cultivated agaves and probably led some brands to change how they sourced their agaves.
A component of this transitional moment was nestled in that production relationship. These new mezcal brands were mostly the fruit of farming relationships, either the brand owned the fields of agave or had really close relationships with the farmers. Many of the previous brands were contract distillers, they’d pay a maestro mezcalero to distill a quantity of mezcal for them, perhaps even contract for a batch of agave, which meant that they never quite had a fully integrated product line, they could never create enough and weren’t as tied into the whole process of planting, raising the agaves, harvesting, distilling, and selling the mezcal. Not that these guys were slouches or the stereotype exploiter. Many of them make great mezcal. Many are great people. And this is an entirely respectable way of doing business. It’s just that when a Vago appears on the market with a new idea and has all the production process behind it, it can really alter the market dynamic. And that’s just what was happening because other family brands with deep integrations with sustainable farms were already in motion ranging from the Cortes family’s El Jolgorio, Koch, and a few others.
On the other side of the market something of greater import to the mezcal business was happening. That artisanal food world that I mentioned way back at the beginning of this piece had grown from the seeds of traditional farmers markets in the 90’s into an industrial juggernaut in the 2000’s with Whole Foods taking over the high end grocery business, restaurants name checking the farms that produced their produce on menus, and Big Organic becoming larger than any projections while posting profound ethical and cultural questions.
Mezcal booms, everyone gets rich, right?
Once upon a time you went to a bar and got a drink. This would be a beer, a shot, or a simple cocktail, say a whiskey and soda or a martini. Then martinis got very big so people started creating new types. Then Manhattans followed suit. Then a whole movement became obsessed with the history of the cocktail. Bars were opened, books written, and bartenders spread across the world pushing detailed cocktail knowledge deep into the crannies of every hotel chain and neighborhood bar that wanted to compete for the money pouring from the wallets of well heeled travelers and novelty seekers. It got so bad that traditional bars had to produce menus, not because they made specialized cocktails but because the new type of patron didn’t know cocktails and expected choices.
Enter mezcal into this crazed fray and that eery silence before the great explosion occurred. Bartenders accustomed to chasing white rabbits were dumbstruck at the possibilities of this fair agave distillate. It has smoke, sugar, alcohol, flavor, and plays well with everything. Suddenly bar tenders were adding mezcal to classic cocktails like negronis and launching into more creative pursuits. The cocktail loving public followed. All of this had profound repercussions for mezcal producers.
First, just consider the volume question. Before the confluence of mezcal and cocktail culture you’d have the occasional drinker asking for a shot of mezcal or the occasional bartender making a mezcal margarita because of a crazed customer or especially inspired night behind the stick. Now you know that you’re going to make 50-100 cocktails a night. Rounding here, let’s say one ounce per cocktail, and there are about 25.5 ounces per .75L bottle so that’s 2-4 bottles of mezcal a night. And that’s just one place. Suddenly you’ve gone from a few bottles per year to more than that in a night. This is great news for the mezcal world because suddenly importers are saying “hell yes, I want your mezcal in my portfolio!” so you run off and make more mezcal, and pay everyone, and everyone gets rich, and the world is a wonderful place.
Well, part of that is true. Yes, the cocktail connection suddenly opened up demand for mezcal at a level never seen before. Many mezcal labels were able to fill that demand by being in the right place at the right time. And yes, many mezcal labels were able to sustainably produce for that situation. But, it’s also something a devil’s bargain.
Let’s start with the economics of the cocktail business. If you haven’t been paying $12 for a cocktail you haven’t traveled widely enough or visited the new temples of the cocktail. That’s been a standard price for a lot of places for a decade now. Not that the price is entirely a bad thing. It’s paid for good booze, great design, profound experiences, and means that bartenders get paid for their craft. But the more people make cocktails, the more the pressure on price, the more pressure on agave producers because they’re in the same situation. Because you can’t make an agave grow faster. Right?
Well, there is one short cut, you can water the agave more so that it gets heavier and offers a higher harvest weight which means more mezcal per agave. As long as you have access to a consistent source of water and don’t sacrifice too much flavor for water weight, you have a decent compromise. Higher mezcal production for a hungry market. Of course there are more unscrupulous routes to that end, none of them very sustainable: You can harvest agave younger, substitute in other spirits like distilled sugar cane, and use industrial processes like diffusers.
Make no mistake, the cocktail movement has been absolutely amazing for the mezcal world. While we don’t have access to exact figures everyone we’ve talked to says that the business model of mezcal only exists because of cocktails. That means that producers are selling a high volume of their entry level or cocktail specific mezcals but a much smaller volume of their higher end bottles. Mezcal makers are getting a stable income flow, brands are figuring out how to build revenue streams to support the rest of their business, and bars have no problem creating amazing cocktails.
Demand means that the big boys take notice
Once you start making money that draws interest from people who are purely in the business of making money and that brings us to the latest mezcal era of acquisitions and consolidation. In the spring of 2017 Pernod Ricard acquired Del Maguey which set off shockwaves in the mezcal space. Would this mean a dilution of the brand? Who would get the money? Would this impact their street cred?
Before anyone could answer any of those questions (For the record: To date Del Maguey is the brand that it was and the word is that everyone involved but especially their distillers shared heavily in the proceeds.) more acquisitions followed and continue to happen. Bacardi added Ilegal Mezcal to their portfolio, Casamigos parlayed George Clooney’s celebrity into a $1 billion purchase price and now produces a major mezcal. Many of the major brands have taken some outside investment culminating in Campari’s 51% of Montelobos earlier this fall.
But it’s not just about volume and big brands. It seems that the more this category grows the more there is to learn about it. New expressions from all over Mexico are appearing all the time. Old traditions are being rekindled, new traditions invented, and the appreciation of these spirits is maturing. Connoisseurs are willing to pay for well produced mezcal and even know so much about it that they don’t care whether it’s certified.
Where do we go from here?
Paraphrasing a famous novelist, it’s the best of times, it’s the worst of times. We have more brands than ever in the US which remains the largest export market for mezcal even if Europe, Asia, and South America are growing rapidly. Mexicans are profiting from this boom on every level, they’re creating brands, planting their fields with agave, and distilling more. Everyone is working to make this industry more sustainable on every level. Investment is pouring in which is reaching more people and places with more impact. And yet, and yet, it’s still an entirely problematic state of being exactly because this industry isn’t inherently sustainable.
Recently I was talking to Esteban Morales Garibi who is behind Raicilla Venenosa, Derrumbes, and many other mezcal projects. He’s a unique character in a large cast in this mezcal world because he understands the business as well as the cultural and production sides of this space. Recently I brashly said something about sustainability and he said “we need to get rid of this idea of sustainability, this isn’t sustainable, it’s manageable or it isn’t.” His point being that the very word “sustainable” gives everyone the sense that anything attached to it is perfectly normative, that we can just keep doing it forever.
If you think about it, mezcal is crazy. Why wait a decade for a plant to mature, then kill it to make a relatively tiny amount of distillate from it? If that’s not a luxury good, I don’t know what is. And yet the people in the business have figured out how to manage the process by doing all the things that we humans excel at; managing agricultural production to the point of normalizing it.
In that same conversation Esteban described how he’d been working with the family that produces Derrumbes’ San Luis Potosi mezcal. Traditionally they had produced a rather small amount of mezcal annually and it was great stuff. But they weren’t making much money from it because of the small production. Esteban approached this family with the idea of making much more mezcal annually using that classic equation, I’ll pay you less per bottle but given so much more volume, you’ll make more. It seems to be working out because that Derrumbes San Luis Potosi label is one of the steals of the century. It’s selling for $40 per bottle at Old Town Tequila right now which has to be the best price to quality ratio in existence.
So, that’s great right? Mexican brand owner working with Mexican producers so that both are financially successful. Esteban even pointed out that by cutting the salmiana, which goes into that label, above its roots forced the plant to produce hijuelos which they could quickly replant in fields already full of salmiana. So, the family is discovering how to manage their crops as their business grows.
The problem is that this is one single example. And, there are other problems on the horizon: As Susan found out in her recent trip to San Luis Potosi, water scarcity is another major factor in that state. As we travel around Mexico we see plenty of these positive signs whether with brands branching out to embrace batch production or bringing their own traditions to market.
There is so much creativity in the marketplace but there are also plenty of tensions, too many brands chasing a still relatively small marketplace. Which is to say, so many exquisite mezcals chasing how many educated palates?