Tequila’s Trouble, California’s Chance?

Turning Mexico’s Agave Glut into Opportunity

 MEXICO’S AGAVE GLUT—driven by years of overplanting and slowing tequila demand—has created both crisis and opportunity across the industry. Prices have collapsed from about $1.70 per kilo ($0.77 per pound) at their peak to roughly $0.10 per kilo ($0.05 per pound) in 2024, leaving many Mexican farmers in financial distress. The situation is compounded by the fact that Mexico currently holds roughly a year’s supply of tequila—about 500 million liters—already in inventory, further depressing demand for new production and intensifying market saturation across the sector.

For California agave growers, this oversupply presents a strategic opportunity to enter a crowded but evolving market with innovative, differentiated products that are neither tequila nor mezcal. This emerging space offers a chance to appeal to consumers seeking authenticity, innovation, and a distinctly local expression of agave-based beverages outside the constraints of Mexico’s denominación de origen system.