7 Solutions to Tequila Supply Chain Disruption

The tequila industry continues to experience significant disruption in the supply of agave, the spirit’s primary ingredient. The problem is affecting distilleries, distributors and brands across the globe. The results are inability to bring product to market (and the associated loss of revenue and damage to relationships), product inconsistencies that are unacceptable to distributors and supermarket buyers, and pressure on margins that can makes sales success unprofitable.

A series of interconnected factors is to blame: vulnerabilities in the cultivation of agave, volatility in availability and pricing, and rising demand for agave from multiple industries. Here is a breakdown of the key reasons for tequila supply chain disruption and how Destilería Arquero is working to counter them:

1. Agave Farming Challenges

Problem: Growing high-quality agave takes expertise and a seven-to-eight-year cycle, making it prone to supply shortages, quality issues, and price surges.

Solution: With 15 years of farming experience, Arquero operates 100 farms and cultivates over 4 million plants, stabilizing supply and quality for our customers.

2. Price Volatility

Problem: Agave’s boom-bust cycles drive price spikes that push out smaller growers and make it hard for distilleries to stay competitive.

Solution: Arquero’s reinvestment strategy strengthens resilience against price swings, offering our customers consistency and the security of long-term partnerships.

3. Environmental Factors

Problem: Extreme weather events like droughts and frosts are reducing agave yields, increasing supply unpredictability.

Solution: As leaders in regenerative farming, we prioritize soil health, water efficiency, and biodiversity, ensuring resilient and sustainable production that aligns with consumer demands.

4. Labor and Operations

Problem: Underfunded labor practices create instability, affecting the quality and reliability of agave supply chains.

Solution: Arquero’s Fair Trade certification and automated, advanced facilities provide stability, ethical standards, and seamless supply chain integration for our customers.

5. Dominance of Major Players

Problem: Major distilleries control agave resources, disadvantaging smaller producers.

Solution: Arquero’s vertically integrated model allows all customers, regardless of size, to benefit from the stability and scalability usually exclusive to industry giants.

6. Alternative Uses for Agave

Problem: Agave is increasingly used for syrups and biofuels, raising competition for tequila production resources.

Solution: Our direct control over agave supply secures resources for tequila, and our commitment to honoring contracts ensures dependable, long-term partnerships.

7. Closed Networks

Problem: The tequila industry’s traditional, region-locked networks pose challenges for international buyers.

Solution: Arquero’s multilingual, globally experienced team brings transparency and accessibility, simplifying the process for international partners.

Underwrite the risk of supply shortages with Arquero
We know that you need to minimize the risks to your supply chain by partnering with distilleries who can be there for today's demand and tomorrow's opportunities. If you want to talk about our supply guarantee for the coming fiscal year with Destilería Arquero, contact our sales team.