Could it be that China is about to become a nation of tequila drinkers? Robin Lynam finds out.
It is perhaps a little premature to write off baijiu, but in November last year Roberto Anaya Moreno – general director of Mexico’s National Chamber of the Tequila Industry (CNIT) who was visiting the country for a promotional event – was quoted by Xinhua Finance as saying that China could become the world’s biggest consumer, ahead of the US and Mexico, within the next five years.
A major obstacle to the growth of the Chinese tequila market was removed in 2014 when the agreement China and Mexico had reached meant China lifted a ban on imports of 100 per cent agave tequila – the category into which all premium tequilas fall.
The ban was, theoretically as least, based on health concerns. There is more methanol in pure agave spirits.
‘Mixto’ tequilas need have only 51 per cent agave, and many of the mass-market brands fell below the two grams of methanol per litre mark at which the Chinese ban took effect.
Accordingly while big names such as Jose Cuervo Especial Silver and Gold could be found in bars in China, not even their top of the line expressions, which are also 100 per cent agave, were available.
Since the ban ended total tequila exports to China have risen, with most of the growth in that quality sector.
According to the CNIT in the first three months of 2015 tequila exports to China were up 17 per cent over the same period in 2014.
The Asia-Pacific region is regarded as a key emerging market for Mexico’s national tipple. Annual exports worldwide now surpass US$1 billion per year (US still the biggest market).
Globally, however, the market is changing. Sales by volume are stalling, but by value are growing, and the better tequilas are sipped rather than slammed.
“Tequila is definitely growing in China but it’s still very small in terms of the overall number of shipments,” says Martin Newell, Hong Kong-based brand manager for Diageo’s Reserve range of high-end spirits, which includes Don Julio tequila.
“A good tequila has to have an expert to sell it. For us it’s been going pretty well with Don Julio, largely around bars and nightclubs, but I don’t see a lot of people buying bottles to take home. It’s still very much something they go out to consume.”
Don Julio is the biggest selling premium tequila in Mexico, and the second biggest internationally, after Patron, which has blazed the premium tequila marketing trail.
Patron, which is represented in Hong Kong and China by Telford International, also has high hopes for Asia, according to the brand’s regional director of marketing and commercial strategy for Asia-Pacific, Milton Alatorre.
“Tequila is still a small percentage of total global spirits, but it’s one of the fastest growing categories. The compound annual growth of premium tequila, globally, is 12.5 per cent from 2008 to 2013.
“Premium tequila is growing at a double digit growth rate in Asia, albeit from a small base. Patron drives the growth in the region, but we still need to continually educate consumers about tequila with a special emphasis on the difference between mixto and premium tequilas.”
Cities in which premium tequilas are increasing their market share are the ones with a relatively sophisticated cocktail culture, such as Hong Kong, Shanghai, Bangkok and Singapore.
In Hong Kong fine sipping tequilas such as Herradura’s El Jimador Anejo and Seleccion Suprema Extra Anejo are already established, alongside Patron’s Burdeos, and Don Julio’s Real. The Chinese Mainland is slowly catching up.
“Young crowds like to try cocktails using tequila, because of that special taste,” says Johnny Sun, bar manager of the Jazz Bar at the Fairmont Peace Hotel in Shanghai.
“It is becoming more and more popular. With every different kind of tequila comes a host of different notes, and that’s why mixologists like it.”
Complicating matters somewhat, however, is growing interest in mezcal, also a distilled agave spirit, but from different areas of Mexico.
To be labelled ‘tequila’ a spirit must be made from blue agave grown in the state of Jalisco (particularly around the city of Tequila) or in designated areas of the states of Guanajuato, Michoacan, Nayarit, and Tamaulipas. Otherwise it’s mezcal, and – perhaps because those spirits are less well known outside Mexico – a lot of bartenders like it.
“Mezcal is one of the spirits that has been given a platform through cocktail bars,” says Newell.
“What makes it an interesting category is that it’s a lot more localised in style. There are some quite smoky varieties, almost similar to an Islay scotch. It all depends where it’s from in Mexico.”
In Singapore, according to Bannie Kang of the Anti:dote bar at the Fairmont Singapore, many drinkers don’t know the difference between the categories.
“Mezcal is becoming increasingly popular as opposed to tequila. This is due to bartenders introducing mezcal in their cocktails and in certain classic cocktails, like negronis, bartenders swap gin with mezcal,” says Kang.
“Many people have the misconception that tequila is a party drink, ordered as a round of shots. Most bartenders know that tequila mixes well in a cocktail and that is where the appeal lies.”
It’s early days yet for Asia’s tequila culture, as Alatorre points out: “In some more mature markets you can find liquor shops with up to 40 or more brands of tequila, and in some other markets you might find only two or three.”
“More people now appreciate the category and the spirit itself,” adds Newell. “Consumers are now picking up the difference between tequila and mezcal. Even people downing shots are choosing to drink a better quality tequila.”