The Tequila industry has undergone tremendous growth over the last decade. More than a hundred new distilleries have started operations, and nearly 2,000 new expressions have been released. How will these new craft brands survive an increasingly crowded Tequila market? Recently, I sat down with Lalo Gonzalez, scion of the legendary Tequila producing family that gave the world Don Julio and proprietor of one of those new Tequila startups that bears his name, to talk about the state of the Tequila business, additive-free Tequila, and the challenges faced by new Tequila brands.
JM: What inspired you to start LALO Tequila, and how has the legacy of Don Julio shaped your thinking and strategy for LALO Tequila? How do you differentiate the brand from Don Julio while embracing your family’s legacy?
LG: LALO Tequila was born from a deep-rooted passion for crafting exceptional Tequila using traditional methods and pure ingredients, influenced by my grandfather and father. Watching them, I gained a profound understanding of Tequila, the agave plant, and the consumer. My father, Lalo, created Don Julio to honor my grandfather, and I founded LALO to pay tribute to him, the same way he did for my grandfather. I’m thankful to continue the family tradition and share my passion and heritage with the world. LALO represents my grandfather's profound passion for agriculture and the agave plant and my father’s passion for the elevated experience in Tequila. Those two legacies are infused into our essence.
Our Tequila is meticulously crafted to accentuate the natural essence of the agave plant while embracing our heritage with a modern twist, setting us apart in the market. While other brands continue to craft other versions of Tequila, we only plan to create a Tequila Blanco so we can continue to honor the agave and Mexican culture in the most respectful way.
JM: Agave prices have a history of extreme cyclicality. In the last year, prices have crashed from a peak of 32 pesos/kilo to just 10 pesos/kilo. How does this volatility affect you as a new Tequila brand, and how do you deal with it?
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LG: The fluctuating agave prices challenge all Tequila brands, including LALO. As a new brand, we navigate this volatility by maintaining close relationships with agave growers and ensuring strategic planning and forecasting. By adopting sustainable practices and fostering long-term partnerships, we aim to mitigate the impact of price fluctuations on our operations and product quality.
JM: There are now more than 3,000 Tequila brands from more than 250 Mexican distilleries with NOMs. How do you differentiate LALO from all of these other brands? More importantly, how do you secure critical shelf space at retail against so many brands?
LG: Amidst thousands of Tequila brands, LALO stands out through its unwavering commitment to quality, authenticity, and transparency. We differentiate ourselves by focusing solely on crafting additive-free Blanco tequila, using only water, agave, and champagne yeast to create a pure and unparalleled taste experience. We believe the aging process happens on the agave fields, not on a barrel. Our dedication to producing only Blanco Tequila highlights our commitment to preserving the natural essence of the agave plant. Securing critical shelf space at retail involves building strong relationships with distributors, retailers, and consumers, emphasizing the unique value proposition of LALO Tequila.
JM: How will the Tequila industry deal with the proliferation of Tequila brands? Can all these brands get shelf space? Are there alternative roads to market for them? Can all of these brands survive?
LG: The spirits industry is one of the most competitive business environments in the world. A handful of big conglomerates own the most popular brands in each category, making it hard for small brands to compete. The rapid growth of Tequila brands presents both opportunities and challenges for the industry. While shelf space may be limited, brands prioritizing quality, innovation, and consumer engagement will thrive.
Alternative routes to market, such as e-commerce and direct-to-consumer channels, offer avenues for brands to reach consumers beyond traditional retail. Ultimately, survival in this competitive landscape depends on delivering exceptional products, building strong brand loyalty, and being authentic—all of which we believe LALO does well. We are thankful that LALO is one of the most successful independently owned spirits brands.
JM: Additives have become a hot issue within the Tequila industry. You claim that LALO uses only water, agave, and yeast. Is that correct? What are the CRT rules concerning the certification and advertising of additive-free Tequilas? Will the CRT ever certify any "purity rule" allowing producers to certify that their Tequilas are only water, agave, and yeast?
LG: Yes, LALO Tequila prides itself on using only water, agave, and champagne yeast in our production process, adhering to the highest standards of purity and authenticity.
Interestingly, Tequilas Blancos can still include up to 1% of additives in their liquid without disclosing it. It’s worth noting that permitted additives include:
- Glycerin, which improves smoothness and mutes flavors.
- Caramel coloring, which darkens the Tequila’s tint.
- Oak extract adds aromas and flavors from oak barrels, and syrups blend artificial flavors and artificial sweeteners.
They can add the artificial sweetener, ‘neotame,’ which is 8,000 times sweeter than sugar and can significantly impact flavor profiles.
So, while many brands are, in fact, 100% agave Tequilas, they may still contain additives in their liquid, which can change the flavor profile and drinking experience of the Tequila. At LALO, we strictly use only water, agave, and champagne yeast ingredients, ensuring that our Tequila remains pure and additive-free.
That said, consumers deserve transparency. They should know if the Tequila they are drinking has been manipulated after distillation. Hopefully, the whole industry will move towards transparency.
JM: You have released a Blanco Tequila. Do you have any plans for any aged expressions in the future?
LG: At LALO Tequila, our unwavering focus will always be on perfecting our exceptional Blanco expression. The true essence of the agave plant is best captured in our Blanco Tequila; thus, we dedicate our full attention and resources to crafting the best Blanco.
By focusing solely on Blanco, we ensure that every bottle reflects our commitment to preserving the authentic flavors and purity of the agave plant. As we continue to grow and evolve, we remain dedicated to this singular pursuit, exploring opportunities for expansion while staying true to our core values and unwavering dedication to excellence.
JM: Thank you.
Below is a brief tasting note of LALO, Tequila Blanco, 40% ABV, 750 ml.
The Tequila is fresh, floral, herbal, and aromatic with notes of lemon zest, fresh mint, a subtle note of white pepper, and a hint of sweet, cooked agave. It’s crisp and clean on the palate, with a hint of wet stone minerality and a smooth, oily mouthfeel that features notes of sweet, cooked agave, pronounced citrus notes of lime and grapefruit, as well as herbal flavors of fresh mint, and a touch of basil and a bit of white pepper. The finish is sweet and smooth, with lingering citrus and herbal notes and a slight peppery kick.
This is an excellent Blanco Tequila. It will work well in a variety of co*cktails, but to fully appreciate its layered complexity, drink it neat or with just a touch of ice.
Salud!
