Excessive agave costs aren’t the one issue driving up the prices of constructing tequila. Producers are pointing to numerous principally pandemic-related points which might be making all the pieces from sourcing bottles, printing labels, and transport merchandise harder and expensive.
“Covid restrictions prevented many firms from working for a time frame, after which many have been granted (permission) to function underneath sure restrictions, resembling diminished employees and social distancing,” says Steffin Oghene, Vice President of Enterprise Improvement at Tequila El Tequileño.
This has had a knock-on impact, and lots of tequila producers have needed to supply new suppliers attributable to an absence of availability, he provides.
Glass bottles are simply one of many needed provides which might be more durable to return by, attributable to pandemic shutdowns and excessive climate in Texas, which stopped the fuel provide to Mexico for a time frame, forcing some glass makers to stop operations. These elements led to a reported 40% lower in glass manufacturing this yr.
The price of glass bottles has elevated attributable to extreme climate and COVID-19.
One other problem dealing with nearly each business is the discount in transport routes and lack of cardboard containers and containers to ship merchandise in.
“Cardboard costs have doubled and we can’t discover picket pallets to ship our tequila. We had to purchase plastic pallets,” says Felipe Camarena, Proprietor and Grasp Distiller on the El Pandillo distillery in Jesús María, Jalisco.
The cardboard scarcity is being pinned not less than partly on the abundance of on-line orders that have been made throughout Covid lockdowns all over the world, consuming up current provide.
As for pallets, lumber costs have elevated in lots of international locations as demand for brand new housing and remodels within the U.S. and elsewhere have soared.
Development within the tequila area has additionally led to a scarcity of distillery staff, in keeping with Camarena, as agave producers, flush with money because of sustained excessive agave costs, have moved to take a position their features in new properties and companies.
One other unwelcome shock for producers: the rising price of copper, which is crucial for making artisanal pot stills.
“Copper costs have gone up 85%, which makes growing capability amid excessive demand very costly,” Camarena says.
He, like many different tequila producers, noticed a surge in gross sales final yr as shoppers shifted from shopping for pictures in bars to purchasing bottles for residence. And the recognition of tequila nonetheless hasn’t abated. To make sure future capability Camarena just lately invested in a brand new 5,000 liter copper pot nonetheless, regardless of the hovering prices.
With elevated copper costs, increasing capability could be costly. This 5,000 liter pot nonetheless on the El Pandillo distillery has greater than doubled in worth up to now yr.
Confronted with these across-the-board price pressures it’s not shocking that some producers have raised their costs to compensate for his or her greater manufacturing prices. On the El Buho tequila retailer in Tlaquepaque, salespeople say that many manufacturers have raised costs just lately, some by as a lot as 20%.
In the meantime, different manufacturers like El Tequileño and Tapatio, have maintained their pre-pandemic costs, hoping life shall be again to regular once more.
However at the same time as provide chains get straightened out, producers’ largest expense continues to be sourcing agave, which nonetheless stands at 27 pesos/ kilo.
“Our primary price remains to be agave,” says Guillermo Erickson Sauza, proprietor of Tequila Fortaleza. “Ten years in the past it price us about US$1,875 to fill our small (15 ton) oven. Now, it prices us round US$22,500,” he provides.
Whereas one would possibly suppose that agave costs would come down in the course of the pandemic, when stores have been closed, the unexpected explosion in demand stored costs excessive.
Fortaleza’s different provide prices, resembling for bottles and cardboard, haven’t risen but as a result of they’re underneath contracts, Sauza added, however that would change quickly.
Loading this oven with agave on the Tequila Fortaleza distillery remains to be the one most costly a part of the method for the reason that worth of agave stays close to historic highs.
Additionally ticking up some producers’ prices is an absence of mature agave (7+ years), which permits tequila makers to get the next yield as a result of mature agaves comprise extra sugar that may be transformed into alcohol. Actually candy agave could make a considerable distinction to producers’ backside strains, permitting them to extend their yields by round 30%, says Sauza.
Nonetheless, agaves aged 5 and 6 years are all that almost all distilleries have entry to proper now. These previous few years are when the plant produces probably the most sugar.
Throughout a latest go to to El Pandillo, we noticed Camarena inspecting cooked agave that just lately got here out of his oven. It was from his final discipline of totally mature agave. The piñas have been darkish with caramelization, and candy agave juices dripped off the leaves as we tore off items to style.
“That is actually candy. I ought to get a fairly good yield,” Camarena mentioned. In these pricey instances, each bit helps.
