Tequila and Mezcal Market Size Projected Reach $12.1 Billion - 2026

Tequila and Mezcal Market size is projected to reach $12.1 billion by 2026, growing at a CAGR of 6.7% over 2021-2026. Tequila and Mezcal is a type of alcohol that is both obtained by a common plant, known as Agave. The plant has several varieties, each having its characteristic with different saturations of methanol, aldehydes and esters. An interesting fact is that all tequila is mezcal, while not all mezcal is tequila. It is owed to the fact that blue weber agave gives rise to Tequila, while any preparation from the agave plant is Mezcal. Tequila and Mezcal are both obtained by a rigorous process of fermentation, distillation, and aging.

Tequila and Mezcal contains a variety of ingredients which if taken in controlled amounts can help in improving digestion and increasing the probiotic levels. It is also advantageous in increasing the absorption of calcium and magnesium, which supports intestinal function.

Tequila and Mezcal market outlook looks optimistic owing to rising levels of disposable income amongst the youth, and owing to the addition of mezcal as an active ingredient in beverages and other popular cocktails and drinks on the lines of premium and super-premium drinks.

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Tequila and Mezcal Market Analysis- By Product Type

By product type, Tequila and Mezcal market share is distributed into two subcategories, where Tequila is bifurcated into- Blanco, Joven, Mixto Gold, Reposado, Anejo, Extra Anejo and Mezcal is bifurcated into- Mezcal Joven, mezcal Anejo, Mezcal Reposado. Of them both, Mezcal Joven had the largest market share of 35.9% in the year 2020. The reason for this demand is accommodated by the fact that the following drink offers a smooth and consistent texture, by also providing a lingering heat.

The Mezcal Joven is set to grow its market size at the fastest pace in the forecast period of 2021-2026 at a CAGR of 8.8%, owing to a wide availability of flavors like white pepper, citrus and green apple which would in turn appeal to the millennial generation who has a knack for trying different cocktails and drinks.

Tequila and Mezcal Market Analysis- By Production Technique

By production technique, Tequila and Mezcal market is subdivided into four different methods, namely mezcal, ancestral, artisanal, and industrial. Demand for artisanal method dominated the market share of tequila and mezcal in the year 2020. The reason for the surge in demand is owing to the efficiency of this production technique, as it uses the current technology of copper stills and industrial plants and the overall process has low wastage, and the sugar content remains constant throughout the batch.

The demand for artisanal is owed to grow at the fastest CAGR over the forecast period of 2021-2026. The overall process is now demanded in various regions owing to the eco-friendliness of the entire process. Deforestation doesn’t take place, neither the lands become barren after the first harvest. The entire process is dependent on the machinery, and hence the labour dependence is negligible.

Tequila and Mezcal Market - By Geography

By Geography, North America dominated the overall segment in the year 2020. The reason for the surge in demand is associated with the rise in distillery and craft drinks in the millennial population. The surge is also associated with the practice of fair trade, and the tendency of the youth to purchase beverages with organic ingredients.

North America is set to dominate the market at a fastest growing CAGR of 8.2%, during the forecast period of 2021-2026, owing to an uprising demand of mezcal in beverages and confectionaries. The demand is also set to grow owing to a natural non-alcoholic beverage being used in making cocktails, which are healthier than conventional drinks.

Tequila and Mezcal Market Drivers

Helps in Improving Digestion

The agave fruit contains natural juices and sugars, which improves the human gut microbiota, which is a community of beneficial microbes. The theory is supported owing to the presence of fructans and fructooligosacchariades, a type of prebiotic that helps in improving any digestive condition and aids in better digestion.

Reduces the risk of diabetes

The presence of sweetness in agave fruit doesn’t impact the blood sugar levels of the body because the body is not designed to absorb them. It is also reported that agave helps in improving the insulin levels within the body and assists in weight loss and reduces the chance of getting obese and developing diabetes.

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Tequila and Mezcal Market Challenges

Processed Agave can cause heart disease

The presence of natural sugars in agave is often lost during the process of fermentation, and the end product contains various compounds which can negatively impact the overall body functions and give rise to chronic illness and diseases. If a regulated quantity of alcohol is not maintained chances of developing heart illnesses increases multi-fold.

Tequila and Mezcal Market Landscape

Product launches, mergers and acquisitions, joint ventures, and R&D activities are key strategies adopted by players in the Tequila and Mezcal Market. Diabetes Food Market top 10 companies include, Mezcal Vago, Pernod Richard, Rey Campero, Los Danzantas, Bacardi Limited, El Grado Tequila, Jose Cuervo, Tequila Arette, El Agave Artesanal and Dos Lunas.

Acquisitions/Product Launches:

In July 2020; Pernod Richard announced a merger with a premium mezcal brand Ojo de Tigre which specialises in manufacturing artisanal mezcal, crafted with an age-old tradition. The agave selected for making mezcal is tobala and espadin, which would help the companies in developing premium mezcal that can be used in both cocktails and neat.

Key Takeaways

North America dominated the tequila and mezcal market in the year 2020, owing to a surge in demand in the beverages industry. The adoption is due to new distilleries coming, providing a whole range of mezcals to chose from.

Increasing preference of the millennial generation for fair trade products will drive the tequila and mezcal market forward.

Detailed analysis of the Strength, Weaknesses, and Opportunities of the prominent players operating in the market will be Tequila and Mezcal market.

Companies operating in the tequila and mezcal industry will have to face stiff competition from different companies within region and across the globe as well.

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