Trends, Treason and Terroir: The Complicated Politics of Non-Mexican Tequila

Tequila is the fastest-growing spirit in the United States, currently projected to pass vodka as the nation’s top-selling alcohol within the next few years. From 2004 to 2021, tequila supplier revenue in the United States grew from $1.068 billion to an astounding $5.162 billion. Forecasts predict that profits will continue to climb.

As you might expect, business magnates, musicians, actors and celebrities of all calibers are rushing to buy in. But, due to a protected designation of origin established in 1974, America’s newest favorite spirit can only be grown and distilled in Mexico.

This dynamic has given birth to a two-sided industry.

Within the burgeoning American-owned tequila status quo, it has become the norm for American investors to travel to Mexico, find a local distillery to partner with, then bring that spirit back to the States stamped with a shiny new label.

In countless promotional pictures for American-owned brands, you’ll see celebrity tequila backers like George Clooney, Dwayne Johnson or Kendall Jenner standing side-by-side in Jalisco with the tequilenos who distill their spirit.

Somewhat inevitably, investors are now looking for a workaround.

Non-Mexican Tequila on the Market

The blue weber agave used to make tequila can be grown fairly easily in most arid regions of the world. It’s just that it can’t be called “tequila” unless it’s made in Mexico.

The same goes for mezcal, which can be made from any agave varietal but must be produced in one of nine approved Mexican states.

This conceit has given birth to a wave of foreign-produced faux-tequilas and mezcals, each bearing brand names which conveniently skirt the guidelines for what can and can’t be called “tequila” or “mezcal.”

Back in 2020, a South African businesswoman debuted Leonista 100% Karoo Agave. The agave spirit is made from a locally-occurring agave varietal called Karoo that can be found throughout South Africa, which is then smoked and distilled in a process nearly identical to that of mezcal.

This spirit would almost certainly be called mezcal had it been produced in Mexico, but it might not be fair to call Leonista a knock-off. It’s debatable whether Mexico has a blanket claim to any agave spirit made anywhere in the world.

The same can’t be said for other faux-tequila brands, some of which have gone above and beyond in their blatant disrespect for tequila’s designation of origin.

Earlier this year, Australian spirits producer Top Shelf International unveiled its newest brand, Act of Treason. Made from blue weber agave grown in North Queensland, Australia, the bottle’s packaging features an agave plant being ripped out of the ground surrounded by the tagline “Hecho En Australia.”

Before settling on Act of Treason, producers originally considered the name “ozcal,” intended as a riff on “mezcal” and “Aussie.”

Between the brand name, the logo and the tagline, Act of Treason is clearly trying to create a stir. But this lack of reverence isn’t just superficial – it also presents a challenge to Mexico’s tequila economy, one which generated over USD 2.6 billion for the country in 2021 alone.

Act of Treason is made from agave grown on a converted ex-plantation which currently boasts 500,000 blue agave plants in the ground, and a projected 1 million by the end of 2024. In fact, Top Shelf International has invited retail and hospitality partners to secure their very own “Field of Treason” within the estate, enabling investors to purchase a private plot.

This is not simply a brand, but the beginning of a full-fledged Australian blue weber agave industry.

They’re not alone. U.C. Davis recently partnered with California agave farmers to establish a $100,000 fund intended to optimize production and distillation in the state.

U.C. Davis is joined by groups like the California Agave Council, an organization that describes itself as “a newly formed trade association of California agave growers, craft distillers, and retailers producing the highest quality California-grown agave spirits.”

So What?

The politics surrounding protected designation of origin laws are tricky, oftentimes rife with accusations of inauthenticity and appropriation.

But this is also an economic conflict. Mexico’s multi-billion dollar tequila industry is enormously aided by the fact that it is the only nation that can produce the world’s trendiest new spirit.

Competition from abroad presents an issue not only for tequila giants like Jose Cuervo and Don Julio, but for smaller distillers as well. Protected designation of origin laws are shown to help foster economic development in rural areas.

Still, competition doesn’t necessarily represent a zero-sum game.

Blue weber agave takes seven years minimum to grow to maturity before it can be distilled. That’s a long time, and as tequila continues to explode in popularity, it’s a maturation period that is increasingly unable to keep up with demand.

While 2022 may have been Mexico’s biggest year ever recorded for tequila exports, it was also the year that experts began warning of a coming tequila shortage.

In the best of both worlds, non-Mexican tequila will serve as a supplement to help reduce the growing pressure on Mexican distilleries. At worst, it may well give birth to an industry that eclipses its nation of origin. It’s a question that will take decades to be answered properly.

Just as true feta cheese can only be made in Greece or true champagne only be made in France, tequila’s designation of origin in Mexico is a precarious one, bound to be challenged again and again as the market’s thirst for agave spirits grows more insatiable.

Time will tell how this new generation of foreign-made agave spirits compares to the real deal.

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