Future of Agave Price (Tequila Price)

There are some predictions about a future agave shortage. Agave has suffered shortages during the last century that have produced increases in Tequila prices, the last one being in 1999 -2004 when agave prices increased 400%.

I was in Miami when this happened. I was quoting a big rectifier 25,000 gallons per month of bulk Tequila, after Sauza stop selling the bulk to protect its prestige brands as Hornitos. I tried with more than 10 distilleries I knew were capable to supply that volume, but none of them wanted to sell bulk, everybody preferred to keep the agave they had to continue producing their own brands. Finally after lots of calls I finally got a distillery willing to supply this volumes and the price was $12.00 Dollars/Gallon, which I quoted my customer. A week later they called to accept the price. I then phoned the distillery to inform their price had been accepted but they (the distillery) told me: “Sorry, the price has changed, now Gallon is $18.00 Dollars”. I could not believe this! I told them my customer would be very upset, but no reason made them to back up. I called my customer to announce the new price. Their response was: “You Mexicans can never keep a deal, that’s why nobody wants to make business with you guys!” and hung the line. A week later the customer called me back to accept my quote, so I called back the distillery and informed them the new price of $18.00/Gallon had been accepted, but I was informed there was a new problem…the price had raised to $22.00 dollars/Gallon. I was so ashamed to inform the new price to my customer that it took me several hours to think the way to say it. Finally I called my customer to tell them the bad news. I can not describe here the words I got from them, but they were really, really pissed off. Again the line went dead. Three days later they called me back to accept the new price if I could keep the price for at least a week. Finally the deal went on and we signed a contract for one year. This experience is just to show how the agave price was fluctuating day by day.

I do not think a situation so drastic will happen again since distilleries now are trying to prevent it by stocking Tequila in huge tanks or by growing their own agave, but agave diseases and plagues can affect the agave plantations. Since 2007 the tequila industry is demanding more agave than the agave that is being planted.

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