{"id":69126,"date":"2025-02-05T06:21:55","date_gmt":"2025-02-05T06:21:55","guid":{"rendered":"https:\/\/peraltafinancing.com\/alcohol\/why-tequila-prices-keep-climbing\/"},"modified":"2025-02-05T06:21:55","modified_gmt":"2025-02-05T06:21:55","slug":"why-tequila-prices-keep-climbing","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=69126","title":{"rendered":"Why Tequila Prices Keep Climbing"},"content":{"rendered":"


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High agave prices aren\u2019t the only factor driving up the costs of making tequila. Producers are pointing to a number of mostly pandemic-related issues that are making everything from sourcing bottles, printing labels, and shipping products more difficult and costly.<\/p>\n

\u201cCovid restrictions prevented many companies from operating for a period of time, and then many were granted (permission) to operate under certain restrictions, such as reduced staff and social distancing,\u201d says Steffin Oghene<\/strong>, Vice President of Business Development at Tequila El Tequile\u00f1o<\/strong>.<\/p>\n

This has had a knock-on effect, and many tequila producers have had to source new suppliers due to a lack of availability, he adds. <\/p>\n

Glass bottles are just one of the necessary supplies that are harder to come by, due to pandemic shutdowns and extreme weather in Texas, which stopped the gas supply to Mexico for a period of time, forcing some glass makers to cease operations. These factors led to a reported 40% decrease in glass production this year.<\/p>\n

\"Tequila
The cost of glass bottles has increased due to severe weather and COVID-19.<\/figcaption><\/figure>\n

Another challenge facing almost every industry is the reduction in shipping routes and lack of cardboard boxes and containers to ship products in.<\/p>\n

\u201cCardboard prices have doubled and we cannot find wooden pallets to ship our tequila. We had to buy plastic pallets,\u201d says Felipe Camarena<\/strong>, Owner and Master Distiller at the El Pandillo distillery in Jes\u00fas Mar\u00eda, Jalisco.<\/p>\n

The cardboard shortage is being pinned<\/a> at least in part on the abundance of online orders that were made during Covid lockdowns around the world, eating up existing supply. <\/p>\n

As for pallets, lumber prices have increased in many countries as demand for new housing and remodels in the U.S. and elsewhere have soared.<\/p>\n

Construction in the tequila region has also led to a shortage of distillery workers, according to Camarena, as agave producers, flush with cash thanks to sustained high agave prices, have moved to invest their gains in new homes and businesses. <\/p>\n

Another unwelcome surprise for producers: the rising cost of copper, which is essential for making artisanal pot stills.<\/p>\n

\u201cCopper prices have gone up 85%, which makes increasing capacity amid high demand very expensive,\u201d Camarena says. <\/p>\n

He, like many other tequila producers, saw a surge in sales last year as consumers shifted from buying shots in bars to buying bottles for home. And the popularity of tequila still hasn\u2019t abated. To ensure future capacity Camarena recently invested in a new 5,000 liter copper pot still, despite the soaring costs.<\/p>\n

\"New
With increased copper prices, expanding capacity can be expensive. This 5,000 liter pot still at the El Pandillo distillery has more than doubled in price in the past year.<\/figcaption><\/figure>\n

Faced with these across-the-board cost pressures it\u2019s not surprising that some producers have raised their prices to compensate for their higher production costs. At the El Buho<\/strong> tequila store in Tlaquepaque, salespeople say that many brands have raised prices recently, some by as much as 20%. <\/p>\n

Meanwhile, other brands like El Tequile\u00f1o and Tapatio<\/strong>, have maintained their pre-pandemic prices, hoping life will be back to normal again. <\/p>\n

But even as supply chains get straightened out, producers\u2019 largest expense continues to be sourcing agave, which still stands at 27 pesos\/ kilo<\/a>. <\/p>\n

\u201cOur number one cost is still agave,\u201d says Guillermo Erickson Sauza<\/strong>, owner of Tequila Fortaleza<\/strong>. \u201cTen years ago it cost us about US$1,875 to fill our small (15 ton) oven. Now, it costs us around US$22,500,\u201d he adds.<\/p>\n

While one might think that agave prices would come down during the pandemic, when retail outlets were closed, the unforeseen explosion in demand kept prices high.<\/p>\n

Fortaleza\u2019s other supply costs, such as for bottles and cardboard, haven\u2019t risen yet because they are under contracts, Sauza added, but that could change soon.<\/p>\n

\"Inside
Loading this oven with agave at the Tequila Fortaleza distillery is still the single most expensive part of the process since the price of agave remains near historic highs.<\/figcaption><\/figure>\n

Also ticking up some producers\u2019 costs is a lack of mature agave (7+ years), which allows tequila makers to get a higher yield because mature agaves contain more sugar that can be converted into alcohol. Really sweet agave can make a substantial difference to producers\u2019 bottom lines, allowing them to increase their yields by around 30%, says Sauza.<\/p>\n

However, agaves aged 5 and 6 years are all that most distilleries have access to right now. Those last few years are when the plant produces the most sugar.<\/p>\n

During a recent visit to El Pandillo, we saw Camarena inspecting cooked agave that recently came out of his oven. It was from his last field of fully mature agave. The pi\u00f1as<\/em> were dark with caramelization, and sweet agave juices dripped off the leaves as we tore off pieces to taste.<\/p>\n

\u201cThis is really sweet. I should get a pretty good yield,\u201d Camarena said. In these costly times, every bit helps.<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

High agave prices aren\u2019t the only factor driving up the costs of making tequila. Producers are pointing to a number of mostly pandemic-related issues that are making everything from sourcing bottles, printing labels, and shipping products more difficult and costly. \u201cCovid restrictions prevented many companies from operating for a period of time, and then many […]<\/p>\n","protected":false},"author":1,"featured_media":69127,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12029],"tags":[1734,11567,16339],"dealstore":[],"offerexpiration":[],"class_list":["post-69126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alcohol","tag-climbing","tag-prices","tag-tequila"],"yoast_head":"\nWhy Tequila Prices Keep Climbing - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=69126\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Tequila Prices Keep Climbing - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"High agave prices aren\u2019t the only factor driving up the costs of making tequila. 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