Monday, November 4, 2013

Mexico's Exports: Beer, Tequila And Now Mezcal

A few months ago I traveled up into the rugged hills outside of Oaxaca City, a colonial metropolis in southern Mexico. I met with Karina Abad, the production manager at Danzantes distillery.

The facility was temporarily closed for restoration. Standing in front of the heavy four-foot-tall stone wheel that Danzantes workers (and work horses) use to crush the roasted agave hearts used to make mezcal, Abad told me “We bottle and produce mezcal here.”
In an article I wrote for Fox News Latino, I explain“Two employees stood next to the circular palenque where work horses pull the massive grinding stone to mash the roasted agave. Year-round, Danzantes’ employees cut off the tough, thin, purplish green leaves of the harvested agave, which looks like a giant aloe vera plant. With the four-foot-long leaves cast aside, the workers place the plants tough hearts, called piñas, onto a bed of hot rocks and smoldering wood-fire charcoal.”
At Danzantes and thousands of other small family-owned distilleries, workers roast the agave piñas in underground ovens, similar to a New Zealand hangi or a New England clam bake. The plants are placed rocks over a bed of hot coals and then covered with banana leaves and dirt and left to roast slowly. During the process the acerbic white agave plant turns mushy, nectar-covered nuggets of golden, stringy pulp. It tastes sort of like a honey-coated roasted acorn squash or a candied pumpkin.
In my Fox News Latino article I explain, “Mezcal, a traditional Oaxacan spirit long enjoyed by southern Mexico’s ranchers, urbanites, and charro horsemen, is currently experiencing an unprecedented boom in popularity both within Mexico and also north of the border. Mezcal has found favor with young professionals and hipsters both in Mexico City and Manhattan.”
Inside the upscale Mezcaloteca bar in Oaxaca City, David Castillo, the bartender at told me that mezcal is a drink that is meant to be savored slowly.
“With industrial drinks that are sometimes mixed [with cheaper alcohol], if you take a shot you’ll feel like a train wreck. But a good mezcal, if you know how to drink it, won’t get you too drunk,” he said.
He poured a centimeter of shimmering, clear 100-proof mezcal into a tumbler and took a careful sip.
“It’s dry, really dry- but smoky at the end,” he told me. 
Mezcal was once dismissed as a blue-collar spirit, but lately it’s catching on in Mexico City, New York, Madrid, and even further abroad.
In my Fox News Latino article I explain in Mexico’s capital city, “Down the street from two orange sculptures of single-speed bicycles and a 15-foot-tall banner announcing the arrival of a new luxury apartment complex, premium mezcals are being sold along with marinated olives, cocoa-covered almonds, chai tea, and gourmet pastries at the Abarrotes delicatessen and bakery in the Roma neighborhood, Mexico City’s hipster-chic epicenter.”
Micaela Miguel, Abarrotes’ 26-year-old owner surveyed her store’s mezcal collection and pointed to a $61 small-batch bottle.
“It’s de moda. Ten years ago you found it in very few places. It wasn’t viewed very highly. Now it’s cool,”she told me.
For generations Oaxaca’s mezcal producers were isolated from the global economy. But now, Mexico’s Ministry of Economy is working with a new generation of entrepreneurs to promote the spirit both within Mexico and around the globe.
As is the case with tequila and beer, mezcal exports are growing. Total, Mexico exports more than a billion dollars of goods and services to the U.S. every day.
In an article I wrote last year, I explained that in 2011 “Mexico exported more than 163 million liters of the agave-based alcohol, mostly to the United States, according to figures from the Mexican government. That’s almost triple the amount the country exported in 1995.”
Jair Tellez, the chef at Merotoro, a posh Mexican restaurant in Mexico City’s upscale Condesa neighborhood, told me that “the new interest in tequila is seen most clearly in the United States.”
Likewise, Mexico’s beer exports are also on the rise. In an article I wrote earlier this year, I explained that Constellation Brands “now enjoys the exclusive right to market and distribute a Mexican beer portfolio that includes Corona, the top-selling import brand in the U.S., as well as Modelo Especial and Corona Light, the third and eighth top-selling brands. All together, Constellation Brands now controls about half of the U.S. imported beer market.” 
Rob Sands, Constellation Brand’s CEO, recently explained that Modelo Especial might even become “as big or bigger than Corona in the next five years.” Total, Constellation Brands reported revenues of $767 million in the third quarter of 2013 alone.
In my beer article, I explain that, “Constellation’s biggest competitor is now Dos Equis, a Mexican beer owned by Heineken. While Heineken has lost market share to competitors, Dos Equis, boosted by a popular spokesman, ‘The Most Interesting Man in the World,’ has enjoyed brisk sales growth in the U.S.”
John Nicolson, the head of Heineken’s Americas unit, is also eyeing Mexico’s beer exports.  He even called Dos Equis the company’s “shining star.” DosEquis sales helped Heineken earn $25 billion last year.
Grupo Modelo’s parent company, AB Inbev earned $39.8 billion last year. Global (non-U.S.) Corona and Modelo Especial sales are contributing to sales growth in 2013.
Now, in addition to exporting tequila and beer, Mexico is also working to boost foreign mezcal sales.
During a recent conversation, Gerardo Patino, the Director for the U.S. Northeast at ProMexico, Mexico export promotion agency told me “We help the small companies to get the product to buyers who can present the brands to the international market.”
As sales rise, mezcal “will be the next tequila in international markets,” Patino said. Right now mezcal exports add up to only a small fraction of foreign tequila sales, but that could change.
Ignacio Carballido, the owner of Casa Mezcal, a trendy restaurant on New York City’s Lower East Side, said New York’s connoisseurs are taking notice of mezcal.
“People are more aware of it in a good way. Now they know it’s a well-respected and old spirit. Before people thought of it as the crazy drink with a worm inside,” he explained.
Oaxaca remains one of the poorest and most politically complicated states in Mexico. Absent rural economic development, Oaxaca has traditionally served as a major sending state for migrant workers in the U.S. But, if the mezcal boom can lead to rural economic development, mezcal may help change Oaxaca’s trajectory.
Castillo, the bartender at Mezcaloteca in Oaxaca City, is optimistic.
“Life here has been affected a lot by immigration, and now some children of mezcaleros have come back to work for them,” he told me.

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