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Future has reached Agave and Tequila Industry. Agave finally began to increase its price since November 2011 when price per Kilo was about $1.00 peso/Kg. Today March 7th. of 2012 agave in good maturity conditions and with 25% to 28% of reducing sugar is being sold to $2.50, although most of agave growers are awaiting to rice to $3.00/ Kg to start selling. Some growers even speculate that agave will be up to $9.00 0r
Last month, Anahi & I visited BeVmo (Beverage & More) headquarters in Walnut Creek Ca. where we met with Mr. Ted Carmon.
When you sit with Ted, you better have a ready and accurate agenda to go through, Ted is extremely efficient and fast. If you do not have all your points defined and your proposals ready, soon your time is gone and you’ve lost a great opportunity to do business with BeVmo.
Founded by Steve Boone and Steve McLaren in 1994 BeVmo is now the largest Wine & Spirits chain liquor store in California and has extended to Arizona and Nevada. More than 120 stores are listed under their directory up to March 2012. In February 2007, BevMo was acquired by tower group L.P., a New York- and London-based private equity firm. BeVmo is a must if you want to commercialize your products in California. They can become the backbone of your business but to get in is not easy, you must have a good distributor, since it is hard for BeVmo to deal directly with producers and importers, and a great product. Thanks to BeVmo thousands of producers are able to reach exposure and good sales.
The International Tequila Seminar took place in Guadalajara, Mexico from December 1st to December 3th of 2010 along with The FIL (International Book Fair). It was organized by the University of Guadalajara and one of points that were discussed was tequila regions or “Terroirs”. The term is defined as: the special characteristics that the geography, geology and climate of a certain place bestowed upon particular varieties. Agricultural sites in the same region share similar soil, weather conditions, and farming techniques, which all contribute to the unique qualities of the crop.
Three main regions or Terroirs were mentioned: Tequila, Jalisco Valley and Jalisco Highlands. Agave develops different flavor profile when grown in each of this regions.
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.