Alvin Starkman & Yvette Astorga
Mezcal, the iconic Mexican agave based spirit, has taken the world by storm over the past decade. Exports to the US, the UK, Europe, Australia and elsewhere around the globe continue to increase exponentially. However mezcal has been slow to arrive in LCBO (Liquor Control Board of Ontario) outlets in Toronto, Ottawa, and elsewhere in Canada’s most populous province. But now it’s here, and its recognition and esteem are finally growing, albeit nowhere near with the gusto encountered south of the border. But why is it so expensive, especially given the low wages and subsistence economic status of many in the state of Oaxaca, the southern Mexico state where most is distilled?
It takes an average of about eight years to bring one of these often majestic looking succulents to maturity, the best time to then harvest and process the plant into mezcal. One need not wait that long, however. And, in any event the length of time to maturity varies a great deal depending on the specie and sub-specie, microclimate where the agave (also locally known as maguey) is grown, whether it is wild or cultivated, if other crops have been under cultivation in between the rows, plus other factors. But assuming the maguey will be in the field for the better part of a decade, and that only recently have brand owners, distillers (locally known as palenqeros), and growers begun to plant much more than previously, we are still a couple of years away until there is enough agave ready to harvest to meet the growing demand. This translates to a “shortage” of raw material. Less than a decade ago a three ton truckload of piñas (the heart of the plant used to make mezcal) of Agave angustifolia Haw (known as espadín, the most common sub-specie used to make mezcal in Oaxaca), sold for 1,200 pesos (about $80 CDN using today’s rate of exchange). Today that same three ton truckload costs over 30,000 pesos! It takes about 10 – 12 kg to produce a litre of the spirit made with espadín at 48% ABV (alcohol by volume). While the cost of raw material has been increasing rapidly, that’s not the main reason for the lofty prices in Ontario today.
In any event one ought not begrudge subsistence farmers who grow maguey. Their agave only 15 years ago was left to die in the fields because no one was buying it. Now they have the opportunity to hop on the gravy train while it is in the station. Regardless, they have by now sold off all of their mature plants, and must wait until their recently sown succulents are again reaching maturity. No one knows what the pricing will be like in the next decade. It is grueling work, that is planting, weeding, checking the fields to ensure there are no infestations, harvesting and preparing the land to once again sow. When co-author Starkman, more of a hobbyist grower has been out in the fields, invariably he returns home tired, sunburned, bloodied from the sharp tips of the agave leaves, and even literally burned from setting the brush and roots ablaze to prepare his field for re-planting.
Palenqueros ought to be given a chance to charge their 150 – 250 pesos per litre (of espadín) while opportunity knocks. They too put in long hours of arduous work, at times in their palenques for 24 hours straight depending on where in the production cycle they find themselves. For generations their families have been producing mezcal while eking out a hard, lower working class existence. The yield of species other than espadín (i.e. tobalá, tepeztate, jabalí) is much less. The palenquero often doesn’t know the yield he will derive from an oven-full of agave, regardless of specie. There are processes of caramelizing through baking, crushing, and finally pitching into the vat. When the mash has begun to bubble after the addition of water, the first sign that the environmental yeasts have begun to do their work, fermentation has begun in earnest.
Yes, there are those entrepreneurs, wannabe export brand owners, who try to squeeze prospective business associate palenqueros as much as possible with a view to obtaining as cheap a price per litre as possible. But are those the mezcal brands you really want to drink? In the course of Starkman’s work matching brand owners with distillers, he will not even work with anyone working towards buying for the cheapest price at the expense of palenqueros.
The average Oaxacan wage is about 80,000 pesos ($5,300 CDN) per year. All mezcal legally and commercially reaching Ontario must be certified by a board known as CRM (Consejo Regulador del Mezcal). The cost of obtaining certification for a palenque is about 35,000 pesos. Think of the belt tightening required to come up with that amount of money. Then, every batch produced must be individually certified. Samples of the raw agave, and of the distilled mezcal, must be sent to a laboratory. The double distilled product is tested for ABV so the consumer is assured that what the label states is what is in the bottle, and to ensure that there is not above the legal limit of methanol and other chemicals in the sample. A CRM employee must attend at the palenque. Each attendance and each submission to the lab, costs the palenquero.
All artisanal mezcal is made with 100% maguey. By contrast, tequila can legally be made with only 51% sugars derived from blue agave; with 49% corn, fruit, sugar cane, or whatever, each of these non-succulent raw materials being much less expensive to grow and able to produce a high yield. As compared to about eight years to grow an agave, corn and the rest can often be harvested twice a year. Look at the proof of a bottle of middle-of-the-road tequila, and it will likely be 76 – 80%, as compared to quality artisanal mezcal which costs much more to produce and is around 90 - 100%.
The labour costs of making artisanal mezcal are much higher than distilling an industrial tequila (or mezcal) product. Typically the former is distilled in either 70 – 80 litre clay pots or 300 liter copper alembic stills in both cases the agave having been baked over firewood and rocks then crushed by hand or with a horse pulling a one ton tahona (stone or stone compound wheel). Industrial tequila by contrast is mass produced in multi-thousand litre diesel fueled iron autoclaves or diffusers, stainless steel fermentation vats and sophisticated continuously running column stills. What type of agave spirit would you prefer imbibing?
Certified bulk mezcal produced in an artisanal fashion must be bottled, sealed and labelled, placed on a pallet with the boxes of six or 12 well protected bottles of usually 750 ml. Then it is trucked from southern Mexico to the Mexico-US border, Mexico City, or a Mexican port town. In each instance it is processing by a customs agent and sometimes warehoused before shipping to Ontario.
Let’s begin using CDN dollars to do our rough costing of a bottle, and say the spirit, an espadín, is at 45% ABV. The price of the liquid is $9, the bottle, cap, label including labour readying it for shipping is another $2.50, and getting it to the city from which it will be transported to Ontario, including clearing Mexican customs, another $1, assuming the shipping is for a full pallet of 800 – 900 bottles. There may be additional charges, such as if the pallet must be warehoused before the next leg of shipping, so let’s up our total out of an abundance of caution to $14. Now obviously the cost per bottle of artisanal mezcal FOB Oaxaca, or even from Mexico City, the border, or one of the ocean ports (for example Salina Cruz or Veracruz), is not what causes the cost at your local LCBO outlet to be so high.
Both the Canadian entrepreneur/brand owner and his agent (though the latter is not required) must make money, so let’s say between them there is an additional $15 which must figure into the equation (entrepreneur/brand owner $12 and agent $3), bringing our total to $29. Assuming the LCBO is entrusted with getting the mezcal to the LCBO warehouse, there is about a further $5 for shipping to Ontario which is tacked on, bringing our total to $34. The LCBO then marks up the cost by about 140%, elevating the total per bottle to $85. Add a further roughly 15% to cover the Ontario HST (health services tax) and what’s known as the enviro fee, and our total at the counter ready for checkout is $97.75.
In co-author Astorga’s work she advises clients about such matters, in a more precise fashion. For our purposes for this article, the foregoing ballpark figures serve to illustrate the point. We must also consider that the brand owner has legal, accounting and office expenses and must spend time in meetings, selling, sourcing the agent and being an employer, etc. And, we started with a very modest bottling amount. If we examine artisanal espadín on the LCBO shelves today (July, 2018), we find YUU BAAL at $96 and Marca Negra at $98.75, consistent with our sample itemization and calculation of figures.
In the back of your mind it might be helpful to understand that the LCBO is the second largest single purchaser of wines and spirits in the world (next to Tesco, the UK retail chain). This means that those in the alcohol business are anxious to get their products into Ontario, which means that the LCBO is in the driver’s seat.
Now consider a mezcal made with an agave other than espadín, perhaps a tepeztate (Agave marmorata), sometimes referred to as a wild specie. It often takes three times longer than an espadín to grow, and has a smaller piña. One of the main determinants of the cost of mezcal in Oaxaca which is sourced for export is the carbohydrate content of the raw agave. The starches will be converted to sugars, and the more sugars in the piña the higher the yield. Generally, the carbohydrates in a tepeztate, or a tobalá (Agave potatorum), are much less than in an espadín, so the exporter’s cost of buying mezcal made with either of these two species (and others) can increase perhaps fourfold. So if we now begin with a liquid cost of $36 (4 X the $9 for espadín), even leaving the other expenses the same upon arrival at the LCBO warehouse, the retail price still reaches upwards of $180. In fact today YUU BAAL tepeztate retails at the LCBO for $222.10.
Other determinants of price enabling the palenquero and/or the brand owner to ask for a higher price include: the reputation of the distiller and the brand, the district in Oaxaca where the palenque is located (i.e. some of the towns in Tlacolula such as Santiago Matatlán and San Juan del Río), the batch size (which can be as little as 100 bottles in some instances although likely nothing that limited would ever reach the LCBO), whether distilled in copper or clay (i.e. regarding the latter, many of the palenques in Santa Catarina Minas), sustainability of production (based on the reputation of the palenquero), and the effectiveness and cost of marketing including the desirability of the product based on the shape, style and quality of the bottle, cap and label. Both YUU BAAL and Marca Negra appear to be making a run at the Ontario market, and have seemingly spend a considerable amount of capital in marketing, be it promotion or bottle design.
Mezcal prices will continue to rise exponentially, globally, at least until production catches up with demand. The LCBO will likely not change how it conducts business, nor will the entrepreneurs bringing the spirit into Ontario. However at least from the perspective of the authors, a bigger piece of the pie (or simply more income) ought to stay with the dedicated, hardworking palenqeros and their families who have been producing this fine spirit all their lives, just as their forebears over the course of hundreds if not thousands of years, generation after generation. Support palenqueros through purchasing mezcal whether retail at the LCBO, in local bars and mezcalerías, or by visiting Oaxaca.
LCBO will continue to call the shots. But the greater the demand for artisanal mezcal in Ontario, the greater the likelihood that the regulatory board will moderate its pricing structure since cases will spend less time in the warehouse and the province will increase net profit by virtual of increased demand. Remember that higher price does not necessarily mean better quality; buy what tastes good to you. Drink responsibly, and enjoy your mezcal!
Yvette Astorga lives in Toronto. She owns and operates www.mezcalpeople.com, assisting Mexican wine and spirits importers to promote and market their products in Ontario. Alvin Stakman lives in Oaxaca. He owns and operates www.mezcaleducationaltours.com, assisting those wanting to export mezcal from Oaxaca, photographers and documentary film makers, as well as both spirits aficionados and novices alike wanting to learn about mezcal through visiting small, rural, family owned palenques.