Once a hardcore party drink, Mexican tequila now finding favor as an upmarket drink

Mexico’s growing craft tequila industry

Small-batch ultra premium tequilas are finding favor with customers across the U.S., and changing the way the tequila industry in Mexico operates.

Inside a storage room next to two rows of oak barrels filled with aging tequila, the gray-haired Guillermo Sauza pours out a small sample of reposado tequila into a tall, thin glass that looks like a mini champagne flute.

“The barrel-strength tequila is new. Bartenders [in the U.S.] love it,” he explains.

Small-batch ultra premium tequilas like those made by Fortaleza, Sauza’s brand, are finding favor with customers from San Diego all the way to the southern tip of Manhattan.

Sauza’s facility has been producing tequila for over a hundred years. A few miles away, Herradura operates a factory on an estate that has been used to produce tequila since the late 1700s.

Once thought of as a hardcore party drink best reserved for raucous college parties, tequila is now finding favor as an upmarket drink for sophisticated urban consumers, especially in the U.S.

Generally, tequilas fall into one of four categories, depending on how long they are aged. Blancos are aged up to two months if at all; reposados are aged in oak barrels for 2 to 12 months; añejos stay in the barrel from 1 to 3 years; the category of extra añejos is recent addition to describe tequilas aged for longer than 3 years.

Herradura now has a line of what it calls “sipping quality” tequilas, such as a limited-edition variety that has been aged for two years in barrels that were previously used to age port.

These tequilas in many ways bear more of a similarity to cognac or whiskeys than to mass-produced blancos. Their flavor is built up when the agave is roasted, layering in notes of smoke and wood during the barrel-aging process.

Gulping down a glass is harshly frowned upon.

“We don’t want to shoot this,” Sauza says.

“It’s very smooth, there’s no burn on the throat,” he says, taking a small sip from his glass. “It picks up a caramel taste, a little bit of citrus.”

The tequila company that bears Sauza’s last name was founded in 1873. Guillermo was born in Chicago to an American father and the great-granddaughter of the distillery’s founder, re-opened the old family distillery in 2005. He started selling in the U.S. in 2006.

His reposado line, which is barrel aged for six months, sells for $59. His añejo line, which is aged for a year and a half and presents a more complex range of flavors, sells for $89, almost double the price of a bottle of good bourbon, such as Woodford Reserve or Knob Creek.

“We are truly a handmade producer. We make 2,000 liters a week,” he says, slapping one of the four-foot tall grinding stones he uses to process the agave after it comes out of his steam oven.

The company uses the original 100-year old agave-grinding mill, updated to be driven by a small tractor instead of a donkey, to mash the soft, roasted agave.

The roasting, crushing and fermentation processes all take place in a small room that is about one third of the size of a basketball court.

Sauza looks for ripe agaves. “The sweeter, the better,” he says. They are roasted for 30 hours, fermented in a 7-foot-tall wooden barrel where the pulp and water generate alcohol.

Finally the raw tequila soup boils in a copper still, condenses and purifies. “It’s the same process my grandfather used,” he says.

But then, Fortaleza is an ultra-premium label. It’s a segment that is finding favor with new consumers and is also piquing the interest of bigger producers.

Just down the road, Herradura produces tequila on an industrial scale. Juan José Alonso, a 46-year-old production supervisor, walks along the elevated catwalk above the massive tanks in which hundreds of thousands of gallons of tequila are fermented every day.

“This is the first phase—[the agave juice] comes in via tubes from the factory—here’s where the fermentation happens.” Alonso takes out a bottle of the raw tequila that is produced the first round of distillation.

Shaking the bottle, Alonso said, “This is a blanco.”

He pours a small sample into the bottle cap. “It has the flavor of cooked agave. It’s 55 percent alcohol. We add water to dilute it.”

Brands like Herradura and José Cuervo all produce blanco tequilas on a massive scale.

They rely on innovative barrel-aging and clever marketing to sell their high-end products. Experimenting with extra-long barrel aging cycles, major tequila producers have been able to create smoky, complexly-flavored tequilas.

But, now interest among connoisseurs is turning toward smaller producers.

Courtenay Greenleaf, the tequila expert at El Vez, an upscale Mexican restaurant in lower Manhattan, says that among tequila aficionados the focus is turning toward craft producers.

“With food everyone wants to know the story, the intricacies of the product,” Greenleaf tells FNL.

A lot of the interest in small-batch tequilas is an off-shoot of mezcal, tequila’s rustic cousin, which is produced in tiny, family-operated craft stills in southern Mexico.

“It’s coming full circle. The trend is pushing towards what mezcal has always been,” Greenleaf says.

Patrón, a large brand that has been name-dropped in songs by Jay-Z, Wiz Kalifa, Cassidy, Nas and Ludacris, now has a “Roca” line in which a traditional milling stone is used to grind the agave.

Carlos Gonzales, the 39-year-old owner of the Denver-based, Jalisco-produced Proximus brand, says, “More and more people are drinking tequila, better tequila, instead of cheap shots. “

“What’s trending is smaller batch,” Greenleaf says. “Instead of making consistent production—people enjoy getting bottles that are not the same every time. It may be from agaves from different fields or higher alcohol.”

Gonzales says, that the increasing interest “is driven by consumers and the growth of the craft spirit industry in the U.S. The craft market is growing. People are trying to drink high quality products.”

The numbers bear that out. Mexico’s exports of premium, 100 percent agave tequilas have grown from a few hundred thousand cases a year in the mid 1990s to more than 63 million liters in 2013.

Fabian Santana, a New York-based analyst from ProMexico, Mexico’s export promotion agency, told FNL, “Patrón was the first to introduce premium iterations of its brand, and later Diageo [the global umbrella company that owns Smirnoff, Johnnie Walker, Captain Morgan and José Cuervo] acquired Don Julio and started marketing it as premium tequila.”

As more people learned to develop a palate for barrel-aged tequilas, the market has also matured.

“Once people start drinking expensive tequila” such as those made by big producers such as Cuervo and Patrón, Gonzales tells FNL, then “they learn there are other tequilas out there.”