Mezcal Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Mezcal Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Mezcal Market is projected to grow at a CAGR of 16.6% during the forecast period (2022-2027).

The COVID-19 crisis has significantly affected this market. The reason for which the market got affected was because of declining tourism and closures of bars, retail shops, and other stores. For example, Pernod Ricard S.A. which is one of the top players in this industry has reported a decline in sales growth by 9.5% in fiscal 2020. Although offline retailing stores were closed due to rules and regulations, still the market has gained a rise through online and e-commerce sales. There was a rise of 42% in sales through online shopping of these alcoholic drinks. For instance, Mercado Libre, the largest Latin American e-commerce retailer estimated a growth of 81% in sales of alcoholic drinks.

The demand for mezcal, a tropical agave plant-based liquor, increased significantly over the past few years and is expected to increase further over the forecast period. The large millennial consumer base across the world is encouraging vendors to expand their geographical presence, which, in turn, is bolstering the mezcal market's growth. Consumers are preferring mezcal over other tequila products due to the availability of a variety of flavors.

North America held the largest share of the global mezcal market, driven by the demand for spirits across the on-trade sales channels and an increase in the younger population for the consumption of a variety of flavors has been a major factor behind the growth of the mezcal market in the region.

Key Market TrendsIncreasing Demand for Distilled Agave-Based Beverages

As the lifestyle is changing the consumers are more focused on premium and organic products, is because of the health consciousness, therefore, many alcohol users are preferring mezcal drinks as a substitute for many alcoholic products. The mezcal drink is made up of succulent agave plants. As agave has a lower glycemic index (GI) of 10%-15% depending upon the product, many consumers prefer agave-based mezcal due to less sugary effects. The demand for agave-based products has raised over the years. For example, Mexico has witnessed significant growth in raising demand for distilled agave-based products around the globe. The taste of mezcal differs from tequila, this is because pinas(agave heart) are smoked for 3-4 days in large pits for manufacturing mezcal, this process eventually provides premium quality and different taste to consumers, thereby, the alcohol users are getting the premium quality with better taste from the organic product are such major factors that are driving the mezcal market.

North America is the Largest Market

Mexico is the origin of mezcal. thus, the North American region is the largest market for the mezcal market. This is due to the presence of the countries such as Mexico and the United States, as they play a significant role in the production of mezcal. Consumers belonging to the middle age group are also very much inclined towards traditional as well as luxury drinks. Hence their contribution to the growth of the mezcal market in North America is projected to be higher in the upcoming years. Due to the emerging demands, the key players in the segment offer various innovative flavors to the consumers, to meet their changing preferences. For instance, Pernod Ricard’s Del Maguey is one of the top players in this industry, becoming the largest selling brand because the company has had an increase in sales of 39%, due to the growing demand for mezcal in the region.

Competitive Landscape

The global mezcal market is highly competitive, with the presence of various international and domestic players. Some of the key players in the market are Pernod Ricard, Ilegal Mezcal, Diageo PLC, and William Grant & Sons Ltd. Key players have been investing in acquiring small players in the mezcal market, especially to leverage the luxury spirits segment and to develop the product portfolio. Key players are majorly focusing on product development and product innovation to meet the consumer's needs by offering a variety in taste and product quality to maintain premiumization. Some of the major players use mergers and acquisitions as their key strategy.

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