Mexico exported 401.4 million liters of tequila in 2023 — a 4.2% drop from 2022 that represents the first time the country’s annual tequila exports have fallen in 13 years.

The Tequila Regulatory Council (CRT) blamed the drop on saturation of distribution channels and the rising cost of blue agave, the cactus used to produce the drink.

In Guanajuato — Mexico’s second-largest tequila-producing state after Jalisco, with 4,000 producers and a 20% share of the national industry’s productive value — the drop was even sharper. The state exported $25 million of tequila, mezcal and beer over the first ten nine months of the year, an annual drop of 33%.

“It’s not a debacle, it’s just the market normalizing,” said Gustavo Escobedo, head of communications for the Coordinator for the Promotion of Foreign Trade (Cofoce).

He pointed out that alcohol consumption surged during the pandemic and immediately after, making 2022 an exceptional year. Mexican tequila exports reached record highs in 2022, showing an annual increase of 34.1% over the first ten months of the year. A slight correction in 2023 is therefore to be expected, Escobedo argued.

Mexican tequila exports have been growing year-on-year since 2009, when the country shipped 136.4 million liters of the spirit. At their peak in 2022, 419 million liters were shipped, worth US $4.36 billion.

The United States is the main destination for Mexican tequila, importing 321.6 million liters in 2023. Tequila overtook whisky as the U.S.’s second most valuable spirit in 2022 and was predicted to overtake vodka in 2023. However, this is yet to be confirmed, after U.S. tequila imports dropped by 5% in 2023.

Other major importers of Mexican tequila in 2023 included Spain (8.3 million liters, down 7.1%), Germany (8.1 million liters, down 21.9%), France (6.2 million liters, up 16.2%) and the United Kingdom (5.5 million liters, up 6.8%).

Despite the slight market dip, the consultancy IMARC Group expects the global tequila market to keep on growing — from $14.7 billion in 2022, to $30.3 billion by 2028.

Mexico is the sole supplier of this market, as tequila has had a globally recognized appellation of origin (AO) since 1974. Today, Mexican law restricts its legal production to five states: Jalisco, Guanajuato, Michoacán, Nayarit and Tamaulipas.

With reports from El Economista and AM