“龍舌蘭酒” this is what you will be seeing in the not too distant future throughout China. It spells “tequila” and means a great deal to the Mexican economy.
Earlier in the month, a meeting was held between the Mexico and China at the highest command to discuss the exportation of the Agave Elixir’s to China, and the value this would have on the market share throughout China and the revenue this would generate for Mexico….
While the health issues as they relate to the methanol content was the primary concern for China, having only imported lower grade tequila’s to date because of the health concerns, it has been determined that the methanol content in the premier and luxury brands is not a health hazard and has opened new gates to the importation of the spirits. Most premier tequila’s produced, made with the 100% agave is suspect of containing more methanol than the limit, making these unavailable to the Chinese until now. Thus the importation of Tequila to China’s markets was 410,000 liters of low grade product. This translates to an enormous jump in consumption and enjoyment by the Chinese, as they become more affluent in the understanding of Tequila, like that of wine, and demand more product.
Currently Mexico exports Tequila to more than one hundred countries, however 80 percent of that share is attributed to the United States consumption. China’s increasing maturation of spirits consumption equates to 5 billion liters, leading with cognac, whiskey and vodka. And although China is prone to her liquor consumption for most social occassions, and is part of the culture overall, it is expected that because Tequila embodies the flavors similar to that of wine produced in China, stronger than that of any wine produced around the world, the expectation is that the premium tequila products will become table top staples in the years to come.
Mexico currently exports tequila to more than 100 countries, but nearly 80% goes to the United States, according to Mexico’s national tequila industry association.
Mexico’s economy stands to gain from this new spirits development in China. The growth opportunities in China relates to an estimated number of 300 Million upper to middle class Chinese consuming the Agave products coming in and retail for roughly $40 to $60 USD per bottle including duties and taxes. This means that in a bigger picture, China stands to be a larger market than that of the United States, as China in her present economy and growing has a larger number of households with disposable incomes than that of the diminishing middle class in the United States with disposable income.
With a distinctive interest in foreign brands in China, the Chinese consumer is looking to make his image, and leave an impression socially with the unique up and coming products belonging to other countries that in truth, are full of Western folklore and legend, a keen interest to the Chinese, that increases daily, as new horizons and cultures open to them. It is in the nature of the rising Chinese to want to spend money on luxurious and unique foreign products. Its social prestige and distinction at it’s best.
Broadening the market for Mexico in the consumption of the product by the millions with the projected growth over the next five years alone, will leave an indelible, if not positive mark on the Mexican economy.
So, the next time you are in Shanghai, Beijing, or Hong Kong for that matter, look for this sign