Un chupito de mezcal, por favor.”

The words roll off my tongue as easily as the smoky liquid goes down. “A shot of mezcal, please.”

To be honest, I’m not much of a drinker. With my small frame and family history, it’s unwise.

But I adore mezcal. Indeed — I hopped on that bandwagon with gusto.

It’s a newfound love. After all, Mexico only began exporting mezcal to the U.S. in the last decade or so.

But in a relatively short time, the spirit has earned quite a reputation as tequila’s smokier, more complex cousin.

Not only has mezcal captured the attention of discerning drinkers everywhere, but it’s garnered interest among investors as well.

Today, we’ll take a look at where the opportunity is — or isn’t — in the mezcal market.

A Tradition of Excellence

Like wine, spirits made from agave have a deep, rich connection with the land. They’re native only to certain states — the most well-known of which is probably Oaxaca, where as much as 90% of commercially available mezcal is produced.

Agave is grown on mountainside plots, favoring altitudes of at least 1,500 meters. The growth period is at least seven years before the plants are fully mature.

When the agave is ready to harvest, workers use mules to haul the plants to family-run distilleries called palenques.

The plants are then ground into a pulp and fermented naturally — without any yeast or other additives — before being distilled into a strong, clear liquor.

Mezcal is often misidentified as a type of tequila. While tequila and mezcal do have a similar alcohol content and are made from the same plant, tequila is made only from one type of agave — blue agave — while mezcal can be made from any type.

The best way to drink it is neat or on the rocks. Because of mezcal’s smoky profile, it pairs well with citrus flavors and is often served with a slice of orange or grapefruit. Like so:

I enjoyed this shot of mezcal — complete with fresh grapefruit and tamarind salt — on the beautiful beach in Tulum on Mexico’s Riviera Maya last October.

Like tequila, mezcal is sometimes aged, but the best stuff is the youngest and clearest. Mezcal doesn’t age well in barrels the way whiskey does. Unaged — or joven — mezcal should be crystal clear. If it’s got a gold or brown tint, it’s likely a reposado (less than a year old) or an añejo (over a year old).

The fact that mezcal is handcrafted in small batches by farmers, not factories, is a huge part of what makes it so appealing — and distinctive.

It’s also one of the biggest challenges producers face: how to scale up production without losing quality and authenticity.

Despite the logistical moat surrounding mezcal as an investment, profits are picking up…

All Aboard the Bandwagon

Over the last five years, the compound average growth rate for mezcal has risen 25% — compared with mere 6.3% growth for tequila.

In 2016, mezcal exports outpaced domestic consumption — and it’s been sitting at No. 3 (after beer and tequila) ever since.

Despite explosive growth in a relatively short time, the mezcal market is still very, very small. Around 244,000 cases were sold in the U.S. last year — a fraction of the 18 million cases of tequila sold.

But some of the world’s largest liquor companies have started making moves to bring more mezcal to the masses…

  • Two years ago, Bacardi, the world’s largest independent spirits producer, acquired a minority stake in Ilegal Mezcal
  • French group Pernod Ricard bought a majority share in Del Maguey Single Village Mezcal that same year
  • Last year, Casamigos, the tequila company co-founded in 2013 by George Clooney, rolled out their first mezcal offering
  • Earlier this year, Constellation Brands, maker of Corona and Svedka vodka, invested heavily in Mezcal El Silencio.

Finally, in July, Breaking Bad actors Aaron Paul and Bryan Cranston launched their new mezcal brand — Dos Hombres — at a cocktail conference in New Orleans.

Outside the big players, there isn’t a lot of opportunity for folks like you and me to invest in mezcal the way people invest in cases of whiskey or wine. It’s still a little too niche.

International success is still a long way off. And only if producers can balance growing demand with the restrictions of traditional distilling methods.

Regardless of how the chips fall, I’m content just to enjoy it.

There’s a rhyme in Oaxaca: “Para todo mal, mezcal, y para todo bien, también,” which means, “For everything bad, mezcal, and for everything good as well.”

I’ll drink to that.


Lucille St. John

Lucille St. John
Managing editor, Unconventional Wealth

P.S. Mezcal may not be an investable asset — yet. But if you are interested in liquid profits, talk to our partners over at Cult Wines about investing in fine wine. From sourcing wine to selling it — Cult Wines has you covered.

Lucille St. John

Lucille St. John is the managing editor of Unconventional Wealth. A gentlewoman and a scholar, Lucille never received much in the way of a financial education. But what she lacks in fiscal knowledge she makes up for in taste.

She’s going to take you with her on her unconventional wealth journey — starting from...

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