Tequila production has soared in recent years, causing environmental and social issues where agave is intensely grown. Oli Dodd looks to the experts for future solutions.

You know the story. In summer 2017, Diageo’s top brass sat down across from Mike Meldman, Rande Gerber and George Clooney, presumably all among a sea of legal counsel, and hashed out a potential billion-dollar deal for the then four-year-old Casamigos brand. Just like that, Clooney was halfway to the billionaires’ clubhouse and everyone with a million followers on Instagram was launching a tequila brand.

But that was a flashpoint in what has become a category suffering from success. The underlying numbers tell a story of dizzying growth. The Consejo Regulador del Tequila (CRT), the category’s regulatory body, reported that in 2017, the year Diageo bought Casamigos, a total of 271.4 million litres of tequila was produced. In 2022, that figure was 651.4 million litres – the category has increased by almost two and a half times in the space of five years. Not only has tequila never been more popular, it’s never been growing faster.

“The issue is that if tequila continues growing, corn and other important crops will be replaced to grow agave and if you don’t plant in a way that will protect the soil, it’ll be horrendous,” says Iván Saldaña, co-founder, master distiller and chief innovation officer at Casa Lumbre, the company which founded Montelobos mezcal, and who earned a PhD in evolutionary biology with a specific focus on agave. “Deforestation is a big issue. There is a hyper-concentration of blue weber agave in some areas, but there are millions of hectares of Mexico where you can grow that agave and we need to get rid of the denominations of origin for that reason.

“Agave, just like grapes hundreds of years ago, has been spread around the world. I think the world should be flooded with agave spirits from everywhere. I am totally against the idea that Mexico is the only country that should make agave spirits – it’s like saying Argentinian wine shouldn’t exist.”

Saldaña has begun planting agave in now barren and arid ex-sugarcane fields in Puebla, a state outside of tequila’s denomination of origin.

“All of that land that used to have sugarcane is dust and erosion, but it’s a great opportunity to plant agave,” he explains. “We’re not destroying nature or forests, we’re giving the agave a chance to recover soils.”

Mexico is suffering from one of the highest deforestation rates on the planet. The Nature Conservancy reports that 180,000ha of forest are lost each year and a third of the country is already severely degraded.

The United Nations Framework Convention on Climate Change has described the deforestation and degradation of Jalisco’s temperate and tropical forests as a “significant environmental and social impact” of tequila production. The removal of forested areas for the planting of agave is an item that is on the agenda of the CRT, which has teamed up with the Jalisco State Government to design and implement the Environmentally Responsible Agave (ARA) certification with the aim of reducing deforestation by half by 2024, and a 100% reduction by 2030. The agreement was signed during COP25 in Madrid and, in November 2021, Don Julio Blanco became the first tequila to receive the ARA certification.

Speaking to Regions4, a network of regional governments for sustainable development, climate change, and biodiversity initiatives, Sergio Graf Montero, secretary of the environment & territorial development of Jalisco, believes the certification will tackle the issue: “All those producers or packers of tequila that want to display a sustainability seal can do so provided they comply with the rules. This allows us to fight directly against deforestation in the state since agave plantations have been one of the main triggers of this phenomenon in recent years.”

Managing supply

Legally, tequila must be made from at least 51% a specific cultivar of the agave tequilana species called blue weber. It’s a specific variety that takes between five and eight years to reach maturity and, given that length of time and fluctuations in demand, tequila producers have periodically navigated shortages of their raw ingredient, the most recent of which was in 2018 when the price of blue weber agave jumped from around eight pesos per kilo to around 25 pesos. By all accounts, the shortage of agave that plagued producers a few years ago is over, and normally that would mean a return to cheap agave, but that near record-high price of more than 20 pesos per kilo has remained.

“Two years ago, we expected the price of agave to drop to one peso per kilo by now, but the success of tequila is overcoming the abundance of agave,” says Saldaña. “Things are getting harder and more dangerous, because what seemed to be an enormous ocean of agave has now been found to just be able to sustain the growth of the industry.”

Given the length of time agave spends in the ground, consistency can be a nightmare for producers and growers to manage.

“One of the tequila industry’s main challenges is ensuring a steady and consistent crop of agave to use during production,” says Antonio Rodriguez, director of education at Bacardi, which bought Patrón for more than $5bn in 2018.

“From time to time, there may be an abundance or shortage of agave. This can lead to imbalances in supply and demand, meaning the prices of the agave can differ and creates less stability for the farmers when planning for the future.

“As part of a collective commitment, the farmers agree to plant a certain number of agave plants each year and, in return, Patrón promises a profitable price for the plants when they’re harvested, whatever the market value. By guaranteeing a market and
price for their agave, we ensure our partner farmers have income stability and are able to continue to plan for the future.”

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Without these collective agreements and commitments, supply and demand can get out of sync – with environmental consequences. In the early 2000s, the lack of foresight took the category to the brink.

“In 1997 and 1998, the price of blue weber was less than one peso per kilo, in the space of three years, it went up to 22 pesos per kilo,” says Saldaña.

“For years the price had been lower than the cost of agave itself. A lot of people bet on a large growth that didn’t arrive. That caused a huge surplus of agave that wasn’t worth picking and so they abandoned their fields. Blue agave has poor genetic diversity, plants are selected for the ability to produce sugar, not resilience. But insects and fungi are very tolerant to pesticides.

“So, when there was a surplus again, there were still farmers who wanted their agave to grow well, but they were surrounded by hectares and hectares of abandoned agave and were being attacked by pests and disease. The biggest problem was the human inability to align demand with supply. Now demand and supply have never been higher.”

And, given the size of the category, a shortage in Jalisco had an impact all over Mexico.

“During the severe shortage in 1999, thousands of kilos of agave espadín were taken from Oaxaca for the production of tequila,” says Gonzalo Serna, a fifth-generation master mezcalero based in Oaxaca who operates Macurichos mezcal.

“It happened again in 2010, and now they have been in Oaxaca for the past two years doing the same thing. It’s a violation of their own denomination of origin. Tequila producers have had to resort to Oaxaca to meet demand. In Oaxaca, they buy three-year-old agaves for their production and it’s sad because the product really loses quality.”

Environmental potential

But here’s the thing. If managed correctly, agave is an ideal crop for distillation.

“The water efficiency of agave is the best in the world, you don’t even need to water it,” says Saldaña. “There are not many crops as sustainable as agave. Compared with crops like sugarcane, wheat, rye or barley, the amount of pesticides used is minimum. Environmentally and culturally, it’s richer to drink a glass of tequila or mezcal than a glass of vodka.”

So, how can consumers be sure that the tequila they’re drinking isn’t part of the problem? The ARA might be a start and, while transparency has never been tequila’s strong suit, there are other ways of being informed.

“If you care about coffee, you don’t drink the massive commercial chain, you get it from somewhere that cares about the origin,” says Megs Miller, former global ambassador for Pernod Ricard’s Tahona Society, who now runs Salón de Agave in Mexico City.

“I’ve heard rumours of big distilleries harvesting agaves as young as three years old. If you’re a very big producer and you’re using a diffuser, you can use additives like oak extract, sugar, caramel colouring and glycerin in your añejos and reposados to mask this. Legally, you can’t add anything to 100% blanco tequila, so there’s nothing to hide behind. So, I would say that it’s a warning sign when brands are pushing their aged tequilas and aren’t promoting their blancos.

Tequila Matchmaker has the Additive Free Program, which is a list of additive-free brands that is being updated all the time. There’s also the Bat Friendly project in which producers allow a percentage of the agave in a field to grow to full maturity, flower, allowing for cross-pollination and reducing the crop’s susceptibility to disease.”

There has been a discussion about whether it’s even possible to consume tequila ethically and it is, so long as you’re responsible for your impact - stocking and collaborating with brands that are transparent about their entire production is a good way of ensuring that you are. As is so often the case, ignorance isn’t really a long-term option, but there are still ways you can drink a Paloma, guilt-free.