Marketing

Importing Mezcal From Oaxaca Into the US & Elsewhere: First Steps

Although you are considering creating your own mezcal brand, there are some questions about the viability of this venture in the booming market for the less well-known cousin to tequila. You may be having trouble understanding all the options and steps you have to take. You want to participate in the boom. Maybe you’re an ardent capitalist with no limits who grabs any opportunity that presents itself. You might be passionate about mezcal and the hand-crafted production processes and the basic tools of this trade. Perhaps you are somewhere in the middle. There is always a new product in Mexico every month, so there may still be room for your project. You are likely to be importing from Oaxaca, the southernmost state where the majority of the spirit agave-based is produced.

Answering the question of market saturation is simple: Yes, there are still viable business opportunities. But this assumes that you have a reasonable price-point for the quality of mezcal you have in mind, and a solid distribution/promotional plan.

Begin by researching the regulatory framework for the country in which you wish to distribute mezcal. It is quite different to how you would import and sell shirts, microwaves, or sofas. You should have at most a basic understanding of alcohol distribution in your home country. For example, Canada has governments that (i.e. There are also governments (e.g., the province of Ontario) that have some influence over all aspects of wine, beer, or liquor sales. There are some states that are subject to the three-tiered system in the US. Take your time to learn before you dive in.

These are the things you should consider before you travel to Oaxaca for your mezcal company. These factors will impact how feasible your plan is and how successful it is. Consider:

  • The ABV (alcohol-by-volume) of your spirit is important because it will affect the price and final retail cost of your mezcal, as well as the market you target. It should be between 36 to 55 percent. However it is suggested that you aim for the lower end of this range as you will struggle to attract people who are already passionate about the spirit.
  • Packaging can be described in terms of top, bottle, labeling, sealing, and sealing. Do you want to make a mold or a stock container? Is it a standard 750ml size or do you prefer a more slimmer bottle with a shorter neck? The weight and shape of the bottle could have an adverse impact on bartenders’ willingness to grab it from shelves containing other products. Do you prefer natural cork to artificial? Do you prefer to spend your money on the label over a heavy, expensive bottle? If you’re inclined towards the latter, keep in mind that a pallet to transport 500 bottles may be sufficient for 900 bottles. This will increase your overall cost per unit.
  • You can choose whether you want your mezcal priced high-end or middle-of the road.
  • Deciding whether to sell blanco /joven (unaged clear) or whether to include an aged mezcal in the mix. Why?
  • Will you be starting out with just one agave specie such as espadín and then over time expand your offerings, or hitting the market guns blazing? There is always a middle ground.
  • Deciding whether you will initially only work with one palenquero or multiple. Is it realistic to expect exclusivity and control over all your palenquero’s certified mezcal?
  • A start-up approach might be something you consider, such as arranging with a palenquero, who isn’t yet certified but is looking for capital to take that route. This will give him access to the international or domestic export market through you.
  • Are you looking to import ancestral (typically distilled from clay and then crushed in a very basic fashion) or artisanal? There are many other combinations and differences among these two types.
  • It is worth considering whether you would be willing to live in Oaxaca. Or, at the very least, visit Oaxaca once a year. You might also have one or more employees to manage it.
  • Do you have the financial resources to take on a project that may not generate enough revenue for its ongoing viability?
  • Which type and how much capitalization do you want?
  • Deciding the best approach to import your first bottles into your market and what the long-term goal is. These factors will impact the choice of the distillery/distilleries with which you partner and the final number of palenqueros that your project can produce.
  • Not only must you consider legal issues such as registrations, filings and contracts in the country where you plan to import mezcal but also Mexico. To export mezcal you will need to follow a complicated regulatory and multi-departmental administrative system. A Mexican lawyer would be a good choice, or even an Oaxacan who is skilled in intellectual property and spirits.

While brand name is important, there are other factors that can have a greater impact on the success of a mezcal project. No matter how small your interest is in Mexico, you must register your brand name in Mexico. You should also consider whether the name is available in Mexico and in your intended market. Do not spend too much effort or resources on brand development until you’re certain the name is not being taken in Mexico. Some entrepreneurs wait until they have visited Oaxaca, where they choose a palenquero. Then, they wait until there to pick a name or wait until the region is in their sights and are inspired to come up with a marketing idea, including a name.

These are just a few of the considerations that must be considered early in the mezcal import process. This list is not exhaustive and was intended to alert anyone who might be interested in the mezcal import business. To maximize your chances of success, be cautious and carefully examine every detail.

molw.net

We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At Molw.net we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

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