Gearing up for the mezcal wars

 From Bloomberg
A Mexican liquor is beginning to win over the hearts of U.S. consumers, and it’s not tequila.

Pernod Ricard SA, the world’s second-largest distiller, is creating a brand to join rival Diageo Plc in the growing market for mezcal, a premium agave-based spirit. The brand, which will hit U.S. shelves in the first half of 2017, is the latest investment in the category by a large beverage company. Sometimes called tequila’s cousin, mezcal is typically distilled by small producers from as many as 30 types of agave, a succulent plant native to Mexico and the southwestern U.S. ...

“Mezcal is something we’ve been looking at for a while,” Pernod Ricard CEO Alexandre Ricard said in an interview. “A team of young recruits at Pernod Ricard Mexico are working on building a small-village brand from scratch, and some of the value will be shared with the local community.”

Global sales of mezcal rose to a record $80 million last year, according to International Wine & Spirits Research. In the U.S., Pernod Ricard and Diageo have benefited from the rising popularity of tequila amid slower vodka sales. From 2010 to 2015, combined sales of tequila and mezcal rose 30% by volume in the U.S., more than any other alcohol category except cognac, according to data from Euromonitor International. By contrast, vodka sales increased 17%. Sprits makers are betting that mezcal will build on the popularity of artisanal products like super-premium tequila, craft beer and small-batch bourbon. ...

In February, London-based Diageo, the world’s largest distiller, signed a distribution agreement with Mezcal Union, a Mexico City brand that’s only five years old. The deal is meant to increase distribution in the U.S.
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