The mezcal market is estimated to grow at a CAGR of 13.18% between 2022 and 2027. The size of the market is forecast to increase by USD 428.18 million. The growth of the market depends on several factors, including the rising demand for premium spirit products, the increasing investment by international players, and the increase in mezcal exports.
This report extensively covers market segmentation by product (Mezcal joven, Mezcal reposado, and Mezcal anejo), distribution channel (offline stores and online stores), and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
What will the Size of the Mezcal Market be During the Forecast Period?
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Parent Market Analysis
Technavio categorizes the global mezcal market as a part of the Packaged Foods & Meats & within the global Consumer Staples industry. The distillers and vintners market covers distillers, vintners, and producers of alcoholic beverages such as wine, spirits, and liqueur. The market is also segmented by manufacturing processes such as fermentation and distillation. The market does not include manufacturers of storage and dispensing equipment. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
Mezcal Market: Key Drivers, Trends, Challenges, and Customer Landscape
The innovative features and user interfaces are notably driving the mezcal market growth, although factors such as increasing production and supply constraints may impede the market growth. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a decrease in demand for the market during the COVID-19 pandemic, a holistic analysis of drivers will help companies refine marketing strategies to gain a competitive advantage.
Key Mezcal Market Driver
The rising demand for premium spirit products is a key factor driving the global mezcal market growth. One of the major factors that are expected to drive the growth of the market during the forecast period is the rising demand for premium alcoholic beverage products. In the past few years, there has been an increase in the demand for premium and super-premium alcoholic beverages in countries such as the US and the UK, especially among Millennial consumers. The high spending capacity among consumers in developed economies such as North America and Western Europe and the rising emphasis by vendors on the launch of highly differentiated premium mezcal products are increasing the popularity and premiumization of mezcal spirits. Various related festivals, such as the London Mezcal Week (UK) and Tequila Mezcal Week (US), focus on educating consumers on Mexican art, music, culture, and tradition as well as different Mexican agave spirits, such as mezcal, tequila, and raicilla. Growing consumer awareness about mezcal production and its differences from other premium alcoholic beverages, such as tequila, is expected to fuel the demand for mezcal during the forecast period.
Key Mezcal Market Trend
The popularity of handcrafted, artisanal Mezcal will fuel the global mezcal market growth. Though the market entry of established distillers such as Diageo and Tequila Cuervo La Rojena SA de CV (Tequila Cuervo) is expanding the production process of mezcal spirits on a commercial scale, the demand for handcrafted, artisanal mezcal spirits is high, especially in North America. Consumers in the US and Mexico are willing to pay a premium for traditionally crafted mezcal spirits. Such varieties of mezcal are generally produced by small-scale family distilleries in Mexico. The production of handcrafted, artisanal mezcal is more than mass-produced mezcal spirits. Vendors such as Pernod Ricard SA, Kimo Sabe, and Fidencio Mezcal (Fidencio) offer premium and ultra-premium handcrafted, artisanal mezcal. The popularity of artisanal mezcal has contributed to an increase in the number of mezcal tours in Mexico, where interested tourists can visit and learn about handcrafted mezcal production in villages such as Oaxaca, Durango, Zacatecas, and Guerrero. Thus, the rising demand for handcrafted artisanal mezcal is expected to drive the growth of the global mezcal market during the forecast period.
Key Mezcal Market Challenge
Increasing production and supply constraints are a major challenge to the global mezcal market growth. The global mezcal market is facing significant challenges related to the production and supply of mezcal products. Unlike tequila, which is also produced from agave plants, mezcal is difficult to produce commercially due to the long maturing period of the agave plant species used for production. Around 30 species of agave plants are used to produce mezcal, with each of them offering a distinct flavor and having different growth cycles. The sugar-rich base of the agave plant is crushed, fermented, and distilled in wood-based ovens to produce mezcal. The increased production by distillers in Mexico to cater to the rising global demand for mezcal spirits is expected to lead to increased deforestation and accentuate the difficulties related to wood procurement in Mexico during the forecast period. Also, the adoption of stringent certification procedures for export-quality Mezcal in Mexico has considerably increased the compliance costs for mezcal vendors in the country. Thus, the challenges related to the production and supply of mezcal spirits are expected to hamper the growth of the market during the forecast period.
Key Mezcal Market Customer Landscape
Our analysis of the Life Cycle of the Global mezcal market indicates a movement from the innovator’s stage to the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries including Mexico, the US, China, Germany, and the UK. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.
Global Mezcal Market Customer Landscape
Who are the Major Mezcal Market Vendors?
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product / service launches, to enhance their presence in the market
backbarproject.com - The company offers mezcal, which is distilled from the agave plant; it has been made in Oaxaca for centuries where each step, from harvest through distillation, is done by hand and the ensuing spirit produced celebrates the distinctive flavor of agave. Also, the company is primarily engaged in the wholesale distribution of distilled spirits, including neutral spirits and ethyl alcohol used in blended wines and distilled liquors.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including :
- BANHEZ SPIRITS COMPANY LLC
- Becle SAB de CV
- Craft Distillers
- Davide Campari Milano NV
- Destileria Tlacolula
- Diageo Plc
- DONA VEGA LLC
- Dos Hombres Inc.
- El Silencio Holdings LLC
- Ilegal Mezcal
- Kimo Sabe Mezcal
- Lagrimas de Dolores SPR de RL
- Las Joyas del Agave SA de CV
- Mezcal de Amor SAPI de CV
- Mezcal Vago
- Pernod Ricard SA
- Rey Campero
- Scorpion Mezcal
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
What is the Fastest-Growing Segment in the Mezcal Market?
The market share growth by the mezcal Joven segment will be significant during the forecast period. Mezcal joven refers to mezcal spirits that are fresh, clear, and typically aged for less than two months. Mezcal joven is either sold in its original form or as a joven Abocado (flavored or infused), which includes the addition of ingredients such as lavender, agave worm, and natural coloring and flavoring agents. Mezcal Joven products find high demand among consumers worldwide owing to their distinct, brighter, and crisper taste when compared with other aged mezcal varieties. Unlike other alcoholic beverages, such as whiskey, mezcal is perceived to taste best when it is not aged. Subsequently, the segment enjoys a dominant market share when compared with other mezcal products.
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The mezcal Joven segment showed a gradual increase in market share, from USD 209.71 million in 2017 and continued to grow by 2021. The popularity of mezcal Joven is rapidly growing worldwide as a standalone drink and as a cocktail beverage, driven primarily by high on-premises sales worldwide. Ilegal Mezcal Joven (Ilegal Mezcal), Sombra Mezcal Joven (Davos Brands), and Montelobos Mezcal Joven (William Grant and Sons) are some of the popular mezcal Joven brands in the cocktail segment. The relatively lower price, easy availability, and the more diverse product range of mezcal Joven spirits when compared with other mezcal products make them a popular gateway mezcal drink among consumers. Overall, the mezcal Joven segment is expected to remain the fastest-growing product segment during the forecast period. Mezcal Joven is also expected to successfully rival alternative alcohol-based beverages such as tequila during the forecast period. Furthermore, our report provides a brief analysis of the historical and forecast market share and their segment along with their reasons for growth from 2017 to 2027.
The growth of this segment is primarily attributed to the increasing adoption of Mezcal by residential consumers, which is driven by an increase in the global demand for the mezcal market.
Which are the Key Regions for Mezcal Market?
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North America is projected to contribute 64% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The mezcal market in North America is expected to witness significant challenges related to production and the impact of stringent regulations. The growing global demand for mezcal is increasingly placing pressure on vendors regarding the sourcing of agave plants as well as wood, which is used as fuel in the distillation process. Additionally, the imposition of NOM 70 regulations in Mexico, which govern the production and export of mezcal in the country, has significantly increased the certification and compliance costs for mezcal producers. These regulations are expected to continue to hamper the participation of small vendors and alter the competitive landscape of the mezcal market in North America during the forecast period.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. The COVID-19 pandemic led to a decline in demand for mezcal in North America. In 2020, the COVID-19 pandemic negatively impacted most North American countries, which resulted in the temporary closure of various industries, including those manufacturing mezcal. Governments in countries such as the US, Canada, and Mexico imposed stringent COVID-19-related restrictions, such as nationwide lockdowns and stay-at-home regulations, in 2020 and 2021. This resulted in the decreased demand for mezcal from physical retail outlets due to the closure of these outlets. Additionally, manufacturers faced supply chain disruptions due to labor and raw material shortages. The shutdowns adversely impacted their production and distribution activities. However, as online channels were active even during the pandemic, there was an increased demand for mezcal. Furthermore, in 2021, the demand for mezcal rebounded in retail stores as regional activities reopened due to the initiation of COVID-19 vaccination drives and the subsequent lifting of lockdowns. This led to the resumption of production processes, including that for mezcal production, which has increased the demand for mezcal in North America. Such factors are expected to drive the growth of the regional mezcal market during the forecast period.
Our report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by product, distribution channel, and region.
- Product Outlook (USD Million, 2017 - 2027)
- Mezcal Joven
- Mezcal Reposado
- Mezcal Anejo
- Distribution channel Outlook (USD Million, 2017 - 2027)
- Large Enterprise
- Small and Medium Enterprise