Becle: Tequila Agave Pricing, Supply & Demand Dynamics
Current Tequila Supply Chain Consultant
inpractise.com/articles/becle-sab-de-cv-tequila-agave-pricing-supply-and-demand-dynamics
Current Tequila Supply Chain Consultant
The executive has over 15 years of experience in the tequila industry. The executive has held multiple roles in supply chain functions at Grupo Campari as well as starting his own tequila brand and advising domestic and foreign companies about buying agave plants from local producers.
Interview Transcript
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That’s what I did, as well.
In terms of tequila production, the average rate of the last five years is 19%. Last year was 23%. I’m taking that average 19% as average projection for the next years and, depending on the deal and the kilos, I can see when the price of agave could go down. We have a lot of agaves from 2019, 2020 but, I think, maybe in 2025 and 2026, we are going to see the price going down because there will be a lot of six and seven year old agave, which will maybe be extra mature that people will have to sell, no matter what the price is.
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That’s what I did, as well.
Now, there is a lot of agave that is planted. But they can wait; they are not in a hurry to sell the agave because most of it is only three or four years old, so they can wait another three or four years – no more than four years – to sell it.
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In terms of prices, why haven’t prices fallen faster in the last couple of years. We’re assuming that five or six year old plants are what are primarily used for driving the price, just for simplicity. If you look at the data a few years ago, from 2015 onwards, there was lot of growth there, in the planting. In your opinion, why haven’t we seen the price come down like many thought it would?
Many people thought, in 2020, the price was going to start to decrease but, due to the increase of consumption in the US and, also, the trend for the añejo, extra añejo, the companies started to use the product they have in tanks. They had to produce more liquid, to age. Two years ago, there was no añejo, extra añejo available on the market. I saw a lot of companies and I helped some companies to find some añejos. Most of the companies saw that and started to buy bourbon barrels to age and started to produce more blanco to age. I didn’t see the agave drop in the past years, because the production has stayed the same, or increased, in order to be able to age product.
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