As with everything, liquor sales come and go in waves and fads. For the right product, at just the right moment, there’s a huge profit to be made. Just within the last 100 years, we’ve seen the rise and fall of vodka, the death and rebirth of bourbon, and now it looks like we’re on the cusp of the next trend in the spirits industry: tequila. But has the credibility and the quality of tequila already been ruined? Is it still the “next” big thing, or are we actually already looking at the fall of tequila?
A Brief History of Liquor Fads
To understand the force (and subsequent devastation) that can come with a liquor fad, you really don’t need to look any further than bourbon.
It took a while for the American whiskey industry to recover after the end of prohibition. Foreign spirits had taken over the collective consciousness of the country in their absence, and the first drink served in the White House after the end of that dark era was actually made with a London dry gin. Tropical and Caribbean spirits like rum saw a huge burst of interest during the tiki craze of the 1930’s, which then itself fizzled out around the onset of the Second World War.
That’s when bourbon came onto the scene with force. It was a truly American drink, for a country fresh out of the war and increasingly facing threats overseas, and the American distilleries were finally producing the spirit in large enough quantities that it was easy to find. Sales went through the roof, and production increased accordingly. The popular spirit was codified into law as a protected American appellation in 1964… just in time for the bourbon market to fall out from under everyone’s feet.
The late 1960’s was a time of rebellion and change in the liquor industry, with cheap vodka becoming the most popular drink. By the time the 1970’s rolled around, the bourbon industry was in shambles with many distilleries forced to shut down and unable to sell the massive quantities of spirits that they had produced in the 60’s (when they had expected the good times to keep rolling).
Bourbon would eventually return, with a fresh bourbon craze coming in the 2000’s and lasting until just about now in 2022. That’s the world we live in right now — one where the craft bourbon and small batch distilled spirit is king. But that can’t last forever, and so spirits companies and opportunists are looking for the next big thing to sink their teeth into.
They seem to think that’s tequila, and I tend to agree. Or, rather, I used to.
Why Tequila is the Perfect Fad Spirit
Students of the bourbon bust in the 1970’s will note that the single biggest contributing factor that made that situation as severe as it was to distilleries was overproduction. Accurate demand forecasting remains a difficult problem even for today’s whiskey companies.
Bourbon, like some versions of rum and even wine, is an aged product. Once you manufacture the raw spirit, you can’t just ship it out the door — it needs to sit in a charred oak barrel for a little while, absorbing the flavors and improving the quality of the spirit along the way. That’s a problem that no amount of technology has solved just yet, and it leaves distillers in a position where they need to be forecasting the market two+ years in advance (at a minimum — it’s often more like five or ten years). Distill too little spirit? They lose out on potential revenue. But distill too much? You’re going to pay a ton of taxes without any corresponding revenue.
That’s what killed so many distilleries in the 20th century — they thought the 1960’s boom was going to continue and they ramped up production. In reality, though, the market cratered and they couldn’t pay the taxes on their spirits (let alone the worker’s salaries). All they were left with was a warehouse full of whiskey that no one wanted.
But tequila is a different animal altogether. Although aged tequila is certainly well-liked, tequila is probably most in-demand in it’s unaged, “blanco” state. It comes straight off the still and into the bottle, dramatically decreasing the amount of time it takes to turn a profit. The raw materials (agave plants) do take about eight years to mature, but there are ways to make the manufacturing process more efficient to compensate or even use artificial sugars to increase yield.
There’s also no need for expensive warehouses to store the spirit while it ages, and no high risk inventory that you might not be able to sell in a few years. You ship whatever comes off the still, and only make as much as you need. Just like with vodka, that means the supply is immediate and can be turned off just as quickly to save costs. But, once again just like vodka… that comes at a high cost in terms of marketing.
Why Celebrities are the Kiss of Death
When it comes to the branding and the marketing of a bourbon, there are a wide variety of factors you can use. Location of the distillery. Grain bill that went into the mash. Length of aging. History of the facility. There are some interesting, unique narratives you can tell about the spirit that make consumers want to buy and taste that specific bottle.
You can’t really say the same about tequila. It all comes from the same plant, harvested the same way, processed in pretty much the same manner, and creating a flavor profile that is nearly identical from one to the next. As an unaged spirit, the advantage is that it is quick to produce — but unless you’ve spent years tasting and evaluating tequila (which most consumers have not), it’s difficult to see or articulate a difference from one to the next. The flavors are all subtle and subdued, and become even less obvious when splashed into a margarita.
That’s why celebrity endorsements are a critical component of why tequila is becoming terrible. There are absolutely some tequila companies that are making a fantastic product, with delicious flavors and interesting manufacturing processes. But the public has no idea about that stuff, and can’t taste the difference. It opens the door to shady manufacturers who just want to sell cheap, quickly produced spirits at exorbitant prices.
And how do you differentiate yourself in a market where the public can’t tell the difference from one bottle to the next? Celebrities.
The problem here is that celebrities, in general, don’t seem to care what they slap their name on. There are some good quality spirits made by famous names you know who actually put time and effort into their bottle — Casamigos is the shining example here — but for every Casamigos, there are three JAJAs (in which the marketing focuses more on the celebrity than it does the contents). Tequila is a market where, unfortunately, there’s room to get away with this kind of slight of hand… and where greed takes over.
This is where we enter the graveyard spiral of the tequila industry. We start with a healthy industry full of innovative distillers, all trying to make a great product. As soon as the celebrities appear, the quality of the product no longer matters since the celebrity is now the main selling point of the spirit. Some distilleries will let their standards slip, trying to cut costs to keep pace with the sales of the inferior celebrity-endorsed products. Even for those who don’t, they will still get painted with the same brush as the overall quality of the tequila market tanks and the general public opinion on these bottles turns sour.
The end result is that a spirit that was finally getting its due on the public stage once again gets unfairly shunned as poor quality swill. What’s especially tragic here is that tequila is a spirit that has tried desperately for decades to shake off outdated perceptions of poor quality that started when distilleries were adding all kinds of sugars and stuff to their bottles, with the ridiculous ‘tequila worm’ being the most pervasive image coming from that period (and unfairly attributed, since it was actually a bottle of mezcal). And just as they are beginning to hit their stride… the celebrities have descended like a flock of vampires to suck the profits out of the industry without any care for the damage they are doing to tequila’s hard fought reputation.
What Can We Do?
Much like the Ghost of Christmas Future, I only provide a vision of one possible path. In my opinion, the most likely one at the moment… but that doesn’t mean we are doomed to watch tequila crash and burn.
Just like a pilot in a graveyard spiral, the way out of this situation is awareness and quick intervention. But it’s not something that a single person can do — instead it’s got to be a collective action by a large group.
The quickest correction would be if spirits companies stopped taking celebrity endorsements and funneled that money into production innovations. But that’s not going to happen, so we’re not even going to entertain that particular branch of the timeline.
A more likely scenario is that the market itself realizes what’s going on and corrects. Instead of celebrity endorsements being something desirable in a tequila brand, the public could start seeing them as a sign that things might not be quite right with this bottle. In fact, that’s something I’m already starting to see anecdotally — people actually being suspicious of products with a famous name attached. Hopefully, enough consumers will start to have a healthy level of skepticism that makes the tequila distillers up their game, restoring the quality in the market and the reputation of these bottles.
Only time will tell how the story ends for the tequila industry. But in the meantime, we definitely welcome comments and reader speculation to predict how and when it will bust — and what spirit will follow it as the next big fad.