Tridge summary
The article outlines a significant drop in agave prices in Mexico, from a record MXP32/kg 18 months ago to MXP5/kg by February 2024, due to an oversupply and reduced demand for premium tequila, particularly in the US. This price crash, resulting from years of enthusiastic planting and the long maturity period of agave plants, might lead to more affordable 100% agave tequila, potentially attracting new consumers. However, the impact in the UK might be minimal due to its smaller market size and high taxation. The current situation also raises concerns for the future of agriculture, with the potential for some growers to go out of business and the risk of reduced supply due to factors like climate change or disease. Despite these challenges, the price drop could offer opportunities to improve tequila quality by allowing agave to mature fully.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.
Original content
Prices for agave are currently in a tailspin as sales of premium products slow in key markets like the US and years of zealous plantings finally catch up – and outstrip – demand. So how will this impact a nascent premium market like the UK? Tequila is currently experiencing a crunch point after several years of rapid growth, particularly in the US. According to the IWSR, agave prices in Mexico hit a record MXP32/kg only 18 months ago. By February 2024 however, they had plunged to MXP5/kg, and price falls are set to continue thanks to the huge numbers of new plantings over the past few years. This number has risen by more than 10% between 2021 and 2022 alone, and the situation is compounded by the fact that agave takes several years to reach maturity. “The very large inventory of agave plants, coupled with slowing demand of premium tequila segments in the US after years of rapid growth, has sparked a panic sale among amateur agave growers who have recently joined the industry in a ...
Source: Harpers
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