Market Trends of Mezcal Industry
Increasing Demand for Premium Distilled Agave-Based Beverages
As lifestyle is changing, consumers are more focused on premium and organic products because of health consciousness. Therefore, many alcohol users prefer mezcal drinks as a substitute for other alcoholic products. The mezcal drink is made up of succulent agave plants. As agave has a lower glycemic index (GI) of 10%-15% depending upon the product, many consumers prefer agave-based mezcal due to its less sugary effects, which have raised the demand for agave-based products over the years.
Additionally, the taste and availability of various flavors in mezcal are attracting more new consumers, which is driving its sales. The taste of mezcal differs from the tequila as pinas (agave heart) are smoked for 3-4 days in large pits for manufacturing mezcal which eventually provides premium quality and a different taste to consumers, thereby providing a premium quality with better taste from the organic product.
Moreover, owing to the higher incomes, the popularity of high-end drinks among the millennial population is growing, and the growing popularity of the cocktail culture in developing nations, such as China and India, is expected to promote the off-trade sales of premium spirits like mezcal. With this surge in demand for mezcal in different nations, manufacturers focus on expanding their businesses, productions, and product portfolios to gain major market shares.
Furthermore, there is a rising trend amongst wealthier consumers, especially those in developed economies such as the United States and Canada, to seek out interesting and novel premium products and trade up to drinks of a niche variety with high production value. As a result, the demand for and volume of premium spirits has increased greatly over the past few years, especially compared to standard spirits. According to Mezcal Regulatory Council, in 2020, exports of mezcal from Mexico increased to 4.8 million liters from 3.42 million liters in 2018.
North America is the Largest Market
Mexico is the origin of mezcal, making the North American region the largest producer in the mezcal market. This is due to the presence of countries such as Mexico and the United States, as they play a significant role in the production of mezcal. Similarly, owing to the consumer's interest in different agave-based drinks like mezcal and their inclination towards traditional and luxury drinks, the consumption of mezcal has been accounting for a significant share in the premium alcohol market of the region. For instance, according to the Distilled Spirits Council of the United States (DISCUS), in 2022, tequila/mezcal accounted for the 4th largest consumption share among distilled spirits in the United States, with almost 9.79%.
Moreover, the rise of the cocktail culture in the region, majorly in the United States, coupled with the measures taken by manufacturers to modernize the marketplace by providing spirits to consumers with greater access and more choices, is expected to support and drive the market's growth in the region. Furthermore, due to the emerging demands, the key players in the segment are accounting for significant increases in their revenues by offering various innovative flavors to consumers to meet their changing preferences.
For instance, Pernod Ricard's Del Maguey, one of the top players in the region that offers various mezcal products and the largest selling brand's net sales in 2021 saw a growth of 4.45% in sales to EUR 8.8 billion (USD 10.492 billion). Similarly, its sales grew substantially in 2022 to EUR 10.7 billion (USD 12.733 billion). With this growth, manufacturers are expected to expand their businesses and mezcal product offerings, thus boosting the market's growth in the region and throughout the globe during the forecast period.
