Carlo Poletti
Co-Founder and Director General
Grupo Mexcalito

Promoting the Value of Mezcal Abroad

By Gabriela Mastache | Mon, 03/23/2020 - 18:15

With the global hype for Mexican products, international trade offers a significant opportunity for high-quality and traditional products, says Carlo Poletti, Co-Founder and Director General of Grupo Mexcalito. “As business owners, it can be daunting to venture into the international arena. Although it is not easy, there are products like Mezcal that have been widely accepted and that can be sold and promoted in a very enriching manner.”

Grupo Mexcalito, a Mexican group that specializes in the production and commercialization of 100 percent artisanal and organic mezcal, has chosen a commercialization strategy based on international trade rather than local consumption. “Around 80 percent of our production is destined for the export market,” says Poletti.

Mezcal production and consumption has increased heavily in the past few year, which Poletti believes is part of a global trend of revaluation and appreciation for traditional drinks. “Throughout the world, we are seeing that people are making an effort to rediscover ancestral drinks from their places of origin.” In Mexico in particular, Poletti acknowledges that tequila consumption paved the way for the cultural transformation that mezcal has experienced. “Mezcal has transformed in an interesting way. It went from being a traditional drink that was only consumed by a specific group of people to becoming an extremely valued Mexican identity product. But without the popularity of tequila, this boom would not have been possible.”

According to data from the Mezcal Regulation Council, in 2018, mezcal production accounted for 5.08 million liters with denomination of origin, representing a more than 500 percent increase in production from the 980,375 litters that were produced in 2011. Although mezcal consumption in places like Mexico City has increased, mezcal producers are increasingly choosing to export their products. In 2018, 2.4 million litters of mezcal production with and without denomination of origin were destined for national consumption, while 3.4 million litters were destined for the export market.

For Poletti, the export market represents an advantage in terms of prices and taxes. “We understand the need to pay taxes, but the percentage that is ascribed for alcoholic beverages in Mexico is extremely high.” The high tax tends to be felt more heavily by SMEs and entrepreneurs than by large companies, Poletti adds. “Without taxes, we could sell our bottle at around MX$400, which is a reasonable and attractive price for a bottle of mezcal. When considering the tax, our price elevates and it becomes harder to compete with more well-known producers.”

Sales of mezcal in other countries also entails taxes, but Poletti says that the percentage is lower than the 53 percent that alcoholic beverages pay in Mexico. “Although we still need to pay taxes, certifications and logistics costs, it is still more competitive to export our product.” The company is FDA-certified for exports to the US, and also is accredited with the Mexican Regulation Council for Mezcal Quality.

Poletti says that after Mexico, the US consumes the most mezcal globally. The liquor especially resonates in New York City. Other markets for Grupo Mexcalito’s mezcal include France, Spain, Monaco and New Zealand. Germany, in particular, has great potential, according to Poletti. “I believe that Germany offers a more interesting opportunity for us. It has been very receptive to our products and it is open to generating lasting commercial relationships.”

With capabilities to engage in a stable production of 10,000 bottles per month, Poletti says that Grupo Mexcalito has already solved the logistics challenge that entails distributing mezcal throughout the world. Despite this, one country that remains a challenge for the commercialization of the product is Japan. “Selling alcoholic beverages to Japan is difficult. Since there are only five alcohol importers, they have a very controlled distribution and commercialization of alcoholic beverages.”

In addition to commercializing mezcal as a high-quality, traditional Mexican beverage, Poletti says that Grupo Mexcalito is focusing on highlighting two key elements: the natural properties of agave and the role the Mexican countryside and its maestros mezcaleros play in the creation of the beverage. “While mezcal might be an alcoholic beverage, it is important not to forget about the benefits the agave has, such as cellular regenerator. It has always been used as a healing plant.”

Poletti points out that the company still has significant room for growth, with the potential to reach more consumers across the globe. “We want mezcal to be known throughout the entire world. Moreover, we want mezcal to be a vehicle for recognizing the work of Mexico’s people and its countryside.”

Photo by:   MBP
Gabriela Mastache Gabriela Mastache Senior Journalist and Industry Analyst