He is considering starting his own brand of Mexican liquor, mezcal, but has some doubts about the project’s viability in this now burgeoning market for tequila’s lesser-known cousin. Alternatively, you just have a little difficulty understanding all the steps you need to take or have as options. You want to be part of the boom; perhaps as an ardent capitalist without limits who seizes the opportunity when he knocks on the door. Or alternatively as someone with a pure passion for mezcal and its artisanal production methods and rudimentary tools of the trade. You may be somewhere in the middle. Is there still room for your project since practically every month there is a new line of products on the market that you want to export from Mexico to? You likely have your eyes on importing from the southern state of Oaxaca, where most of the agave-based liquor is distilled.

The simple answer to the question of market saturation is yes, there are still practical business opportunities. But this assumes that it is reasonably priced for the quality of mezcal you have in mind and a solid distribution / promotion plan.

Start by learning as much as possible about the regulatory framework of the jurisdiction in which you want to distribute mezcal. Ultimately, it is very different from how you would import and sell t-shirts, microwaves, or sofas. Presumably you already have at least a cursory knowledge of the distribution of alcohol in at least your home country. But remember that, for example, with respect to Canada, there are governments (that is, of the province of Ontario) that control at least some aspects of all sales of spirits, beer and wine. If you are considering the US, there are some states that are subject to the three-tier system. Consequently, take your time and learn before diving in.

There are matters that you should at least consider before even visiting Oaxaca with your mezcal business in mind. They have an impact on the extent to which your plan will be feasible and, more importantly, successful. Think about:

  • ABV (alcohol by volume) of the liquor, because making that determination will affect the price you pay for your mezcal and the ultimate retail cost to consumers, and it will have an effect on your target market. It should be between 36 and 55 percent, although it is suggested that the closer you get to the lower end of the range, the less successful you will be in attracting those who are already fond of the spirit.

  • Packaging in terms of bottle, cap, labeling including sealing. Thinking of buying a stock bottle or making a mold? Will it be a more or less standard 750ml shape, or do you have a stockier bottle with a shorter neck in mind? If it’s the latter, the weight and shape could negatively affect the extent to which waiters will be inclined to grab it from a shelf containing various other items. Are you considering natural cork instead of artificial and why? Would you rather put your money on the label instead of a heavy and expensive bottle? If you’re leaning towards the latter, keep in mind that a transport pallet can accommodate just 500 bottles instead of 900 bottles, increasing your final cost per unit.

  • Whether you want your mezcal to be priced high-end, mid-way, or inexpensive.

  • Decide if you will sell only white / young (transparent without aging) or if you will consider having an aged mezcal in your repertoire. Why?

  • Will you start with a single species of agave like sprats and then over time expand your offering or hit the market in full force? Don’t forget that there is a middle ground.

  • Decide if you will initially work with a single palenquero or more. Do you expect exclusivity on all the certified mezcal from your palenquero and recognize that at least initially this might not be the best for you?

  • You may want to consider an initial focus plan, reach an agreement with a palenquero who is not yet certified and is looking for capital to follow that route by which he, through you, has access to the export market, either national. international gold.

  • Is the plan to import ancestral (typically clay distilled and crushed in a relatively rudimentary way) or artisanal (traditionally distilled in copper stills? There are other permutations and differences between these two categories.

  • You should consider whether or not you would be prepared to live in Oaxaca or, at the very least, visit the city / region of the state where your operation is located several times a year. Alternatively, you can have one or more full-time employees to run it.

  • Can you afford to embark on a project that doesn’t necessarily produce enough income for your continued viability?

  • What type and amount of capitalization are you considering?

  • Determine the most prudent approach in terms of the number of bottles to initially import into your market and the long-term goal. This is likely to affect your decision on the type and size of distillery / distilleries you want to partner with, and the maximum number of palenqueros when your project is operating to its full potential.

  • Legal matters like contracts, registrations, and filings should be considered not only for the jurisdiction you want to import mezcal into, but also for Mexico. There is a relatively sophisticated multi-departmental administrative regulatory framework that you must comply with in order to export mezcal, so a Mexican lawyer is suggested, better still an Oaxacan with experience in both intellectual property and spirits.

Of course, the brand is important, but sometimes other factors play a bigger role in affecting the success of a mezcal project. Your trademark must be registered in Mexico even if you have no interest in the national market. Therefore, you should consider a name that you think is available in your proposed market jurisdiction, as well as Mexico. Do not spend an inordinate amount of effort and resources developing a brand until you have confirmed that the brand is not used in Mexico. Some entrepreneurs actually wait until they have been in Oaxaca and have decided on a palenquero, and then select a name, or they wait until they are in the region and somehow have been inspired to the point where a marketing concept emerges, including the name.

The foregoing is an enumeration of a limited number of considerations that should be considered early in the process of embarking on a mezcal import project. The list is far from exhaustive, and is only intended to alert those with an interest in entering the mezcal business of its complexity. Proceed with caution and explore every detail meticulously, thus maximizing the likelihood of success.

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