With more drinkers reaching for tequila-based ready-to-drink (RTD) cocktails, mezcal versions could seem like a natural next step considering the spirit’s recent rise. Madre Mezcal, a brand with a foothold in the mezcal market is the most recent to launch their version, a 5% ABV can called Desert Water that comes in four flavors. Meanwhile, Elenita, which launched as the first mezcal RTD in 2020, has been steadily growing their distribution. But unlike other agave spirit RTDs, they might not get much competition for a while – the supply chain challenges are just that big
Mezcal sales by volume in the U.S. increased 24.8% in 2019 and 14.5% in 2020, and research firm IWSR Drinks Market Analysis forecasts a 10.5% compound annual growth rate (CAGR) between 2021 and 2025. Meanwhile, tequila RTDs are a fast growing segment— online retailer Drizly recently reported the newer drink as the top of the list for consumers to try. But despite the burgeoning selection of mezcal bottles on the shelf, there are less than a handful of mezcal-based RTDs in the U.S.
“All these other seltzers and RTDs were coming out and we thought, why not make the first mezcal brand RTD?” said Jordan Dil, the co-founder of Elenita.
Dil and his Mexico City-native partner, Mikel Noriega, bonded over their love of Mexico and mezcal while at UCLA. The duo decided to launch the RTD brand on a trip to the Mexican capital, but it took a year and a half of planning to build a supply chain that would comply with the laws that govern mezcal.
That’s because there is a set of legal definitions for the spirit— and mezcal production, exportation and labels have regulations based on its Denomination of Origin (DO), which restricts its appellation to certain states in Mexico. Unlike tequila mixto, which supplies many of the tequila RTDs, the Mezcal Regulatory Council (CRM) doesn’t allow for the exportation of mezcal in bulk beyond five liters. Brands could technically bulk export an agave spirit that is produced like mezcal, but legally it couldn’t be labeled as such.
To comply with the CRM, Elenita’s entire supply chain is based in Mexico. They work with two distilleries in Oaxaca that produce their base spirit exclusively for the brand and brought in a co-packer as a partner to compensate for a lower production level than the typical minimums. The result is that the can is CRM-certified, which consumers can gauge from specific label characteristics. Dil said the company is also working on agave planting initiatives, a practice established by most mezcal companies as the growing category faces concerns of sustainability.
“It was a pretty big supply chain undertaking,” he said.
But that undertaking creates an advantage: according to Dil, the start-up’s RTD mezcal label and made-in-Mexico story is a unique selling point for Elenita in an increasingly crowded segment. Ready-to-drink canned cocktails are the fastest-growing alcoholic beverage category in the US market, according to a 2021 IWSR report.
“I think being an RTD when we first started approaching retailers, it was a given that they would take it,” he said. “Now the RTD market has gotten really saturated and competitive, so being a mezcal RTD is something that’s differentiated, and definitely helps us stand out.”
Madre Mezcal’s Desert Water is produced in California with CRM-certified bottles of the brand’s mezcal, which have been imported since 2018. Still, the process of importing cases of bottles only to be used for another product might be indicative of who else will join them on the market: likely established brands with a cocktail-focused product and the wherewithal to absorb extra packaging costs, or brands already producing canned beverages in Mexico. The new product has allowed their mezcalero (mezcal distiller) partners to double the production of their espadin mezcal, according to CEO Chris Stephenson.
The CEO sees the line as an opportunity to expand mezcal into new drinking occasions that are typically dominated by the beer category, while serving as an entrypoint into mezcal. Flavors come in blends like prickly pear and lemon, and a mushroom edition made with adaptogenic mushrooms, honey and sage.
“The response so far has been really great. At one of our pre-launch tasting events at the ACE Hotel during Coachella, about one third of the folks we sampled didn’t know what mezcal was, so it was great to see in real-time how Desert Water acts as an introduction to the spirit,” he said.
This summer the brand will be hitting in-person events that highlight the outdoor, traditionally beer-dominated drinking occasion, as well as partner with influential friends of the brand for social media content and campaigns.
Dil also sees Elenita as solving three problems for the newly mezcal-curious. The cocktails provide a lower price point over a bottle, and eliminate the process of sorting through brands. Flavors like passion fruit paloma and strawberry mule also give drinkers a more approachable format other than sipping straight or experimenting with at home mezcal cocktailing. Now, he just has to double down on reaching more of the right consumers.
“It’s people who travel, people who enjoy food and wine festivals, there’s a curiosity aspect there, it’s people who want to try something like mezcal,” he said.