Which Exotic Spirits Will Trend in 2018?

Mar 27, 2018by Thomas Henry Strenk

American consumers have developed a thirst for the exotic, and they are searching the globe for new and novel spirits to taste, aided in their quest by innovative producers and importers.The phenomenon is driven by a number of factors, and trends: wider-ranging travel, expanding interest in ethnic cuisines and immigrant communities longing for a taste of home.

Much of the interest in exotic liquors is generated by the cocktail renaissance, as bartenders investigate new ways to wow customers. On-premise explorations lead consumers to replicate those intriguing cocktails at home, and drive them to retail stores.

We have identified three regions where local liquids are angling for center stage in the American market: Mexico, South America and Asia. Of the spirits from these areas, some are virtually unknown in the U.S. market, while others have established footholds here.

Mexico: Mezcal Remains Red Hot

“What hot right now? Three words: Mezcal, mezcal, mezcal,” quips retailer Joe Keeper, owner of Bar Keeper in Los Angeles. The shop, which caters to cocktail a cionados, stocks about 50 different mezcals and has to replenish stocks weekly. “We’ve carried mezcal for a while, but in the last year or two, consumers have gotten interested in the variations—espadin, tobala, pechuga.”

Of course, Tequila has long enjoyed strong growth in the U.S. Supplier revenues were up nearly 10% last year, according to the Distilled Spirits Council (DISCUS). Now another agave-based spirit has emerged; mezcal grew from fewer than 50,000 cases in 2009 to approximately 360,000 cases in 2017.

“The explosion in Tequila has been good for mezcal,” noted DISCUS’s chief economist David Ozgo at the council’s recent economic briefing. “What’s driving growth is consumer demand for variety.”

There is no doubt that American consumers are intrigued by Tequila’s smoky cousin and, observers say, that curiosity may carry over to other agave distillates such as bacanora, raicilla and sotol.

“We see the mezcal category doubling over the next five years to exceed 1.2 million cases. Double-digit growth will likely continue for the next 10 years plus,” says John Beaudette, president and CEO of MHW, Ltd., a Long Island, NY-based importer. “A great indicator of the confidence in growth is that industry giants such as Bacardi, Pernod Ricard and Diageo have taken positions in mezcal brands over the last two years.”

“Consumers, especially Millennials, are always looking for the next trend—something new and exciting,” says Lisa Marcus of Riviera Imports and Tres Papalote Mezcal. “Mezcal is a mystical magical spirit, rich in tradition and part of the Mexican culture. With the rise in popularity of tequila over the past decade it would make sense that the time has come for a new agave favorite.” The company will promote Cinco de Mayo this year with a logoed copper mule cup.

Tres Papalote has also added a new expression crafted from espadin agave (the original is from the cupreata variety), meant to compete at a lower price point, Marcus says. “It’s a bit lighter on the smoke with a nice citrus finish.”

“Mezcal is growing crazy; that section of our store has really expanded,” says Ryan Bolton, spirits specialist at Hi-Time Wine Cellars in Costa Mesa, CA. “It started with cocktails, but now people are sipping them, especially the high-end expressions.”

“Using mezcal in cocktails is a great way to expose people to its complex flavor profile and drive growth,” says Shem Blum, brand manager for Montelobos Mezcal and Ancho Reyes Liqueur at William Grant & Sons. “Additionally, the artisanal mezcals that are driving the category have a rich history, which appeals to today’s consumers who are engaging with spirits with authentic provenance.”

While the original Montelobos is produced from organic espadin agave, the company is launching Montelobos Tobalá, made from the rare Tobalá varietal of agave.

“As agave continues to surge in popularity, I’m sure lesser-known agave distillates will begin to garner greater awareness,” adds Blum, speaking of sotol, bacanora and raicilla.

“We just started carrying a sotol brand and have booked some in-store tastings; I think it will be well-received,” says Steve Huang, general manager at Sterling Grapes & Grains in Brooklyn, NY. The retailer stocks 10 mezcals, which are selling very well, he adds. “Customers who are already into Tequila want to explore further.”

One of the challenges for the mezcal and tequila categories is sustainability of the agave plants, which can take decades to mature.

“Bacanora, sotol—used to be we couldn’t give them away; no one knew what they were,” recalls Keeper. Now the retailer carries a good representative selection of those other agaves.

MHW has been working with Hacienda de Chihuahua Sotol for over 10 years. “While this agave distillate category remains small, brands like Hacienda de Chihuahua Sotol grow their volume and consumer base consistently every year.

All agave distillates will benefit from the tequila and mezcal growth trends as consumers get more curious as to agave-affiliated options and stories,” Beaudette says.

One of the pioneers of artisanal mezcal and currently the top seller in the U.S. market is Del Maguey Single Village Mezcal. Last year Pernod Ricard acquired a majority stake in the company, while retaining founder Ron Cooper and his team. Recently Del Maguey launched an edition of its Vino de Mezcal series made from Wild Jabali. Later in 2018, a new Tobasiche Mezcal will debut.

One of the challenges for the category is sustainability of the agave plants, which can take decades to mature.

“Upholding sustainable practices must be a front-of-the-mind concern to ensure the future of the producers and the category,” says Misty Kalkofen, Madrina for Del Maguey. “Respect must be paid to the wisdom of the producers in regards to the traditional farming methods, crop maintenance and production processes that have supported the health of the land and the culture of the community for hundreds of years. At the same time, we need to introduce technologies that can assist in the preservation of resources such as solar power. Finally, issues of economic and social sustainability must be weighted equally with the concern for the environment.”

South America: Pisco, Singani and Cachaca

Like Mexico, South America has its own bibulous traditions in pisco (the brandy native to Peru and Chile) and cachaca, Brazil’s national spirit distilled from sugarcane juice. Both have a growing presence in the U.S. market largely due to the popularity of cocktails— the Pisco Sour and the Caipirinha. Also emerging on the American scene is singani, a  brandy indigenous to Bolivia.

“The Pisco Sour is a sexy cocktail—with the egg white foam and bitters on top,” Keeper notes. Thanks to that cocktail, pisco is selling well at his store. But customers are also sipping them. “People are savvy about the varietal expressions, the grape varieties.”

“There are three main movements that have recently increased the popularity of Peruvian pisco with the trade and consumer,” says Tony Matchus, chief operating officer of Pisco Porton LLC. He cites the craft cocktail movement, which is now looking for alternatives to clear spirits for mixing. “Peruvian Pisco, ‘the fifth white spirit,’ provides the necessary versatility in cocktail creation while also allowing for “neat” consumption—a manner that is traditionally Peruvian.” Also, Peru has become a tourist destination that’s led to the discovery of Peruvian cuisine, a phenomenon that has migrated to the U.S.

“Peruvian pisco, with its three styles, lends itself to accompanying many different dishes.” And finally, Matchus points out, Peruvian pisco is an all-natural product. Strict DOC laws call for single distillation from fresh wine during harvest, with no water added, no sugar added, no aging in a barrel and minimum resting periods of three months. Each vintage is a different expression with a unique personality, Matchus says.

Porton is produced at Hacienda La Caravedo, founded in 1684, which has been producing pisco for 334 years. This year, the company will launch a new global brand called “Caravedo,” reflecting the company’s provenance.

Although the TTB recognizes pisco as a brandy coming from either Peru or Chile, there are signi cant differences between them. Peruvian pisco can be made from eight grape varietals in three styles. Chilean pisco can be produced from over a dozen grape varieties, can be distilled multiple times, can mature in wood barrels and producers can bring it to proof with water and add flavorings. Right now, most of the pisco found on retail shelves and back-bars in the U.S. is Peruvian; Chile has only a very small piece of the market.

Now comes another brandy contender from South America—singani from Bolivia, which has a different and equally ancient story.

“Singani is a celebration of one grape, the Muscat of Alexandria, which by law must be grown and distilled a minimum of 5,200 feet above sea level in the Andes Mountains of Bolivia,” says Jonathan Brathwaite, COO of Singani 63. In addition, Singani 63 is distilled two times in Cognac copper pot stills and rests a minimum of eight months in stainless steel. Director/actor Steven Soderbergh discovered singani while filming in Bolivia and has made it his mission to introduce the brandy to the world. Singani 63 is now distributed in every major craft cocktail market in the U.S.

“Singani 63 is featured at such renowned cocktail destinations as Death & Co, PDT, Pegu Club, Walker Inn, Trick Dog and Clover Club, just to highlight a few,” Brathwaite says. Singani 63 and Steven Soderbergh also own the rights to a top-shelf sipping singani called Don Lucho, which will roll out sometime in the near future.

“Soderbergh lives in our neighborhood, which may be the reason we sell so much Singani 63,” says Keeper. The retailer shelves it alongside the pisco selection.

The national spirit of Brazil, cachaca, is a cousin to rum. Made from fresh sugarcane juice rather than molasses. “We shelve cachaca in the rum aisle,” says Bolton at Hi-Time Wine Cellars. “There’s a small increase in interest because of cocktail curiosity,” he adds.

“For cachaca, clever marketing of cocktails such as the Caipirinha have been extremely effective in creating trial and educating consumers,” Beaudette says. Prior to the recent acquisition of category leader Leblon Cachaca by Bacardi, MHW was the service importer for the brand since its inception 10 years ago. “Leblon founder Steve Luttmann did a phenomenal job separating cachaca from rum so that consumers could taste and experience the difference. He proved that a single brand could help develop and jumpstart a new spirits category,” Beaudette adds.

Asia: Shochu, Soju and Baiju

Japanese whiskies are super-trendy right now, but a number of Asian spirits are waiting in the wings for a chance at stardom. Specifically Japanese shochu, soju from Korea and the Chinese baijiu.

Although soju and shochu are often conflated, there are distinct differences.

Soju is made from rice or other grains and produced by continuous distillation; the final product has a fairly low ABV (around 20%) and is often sweet. Jinro is the dominant brand. Soju is probably most familiar to Americans, as a staple offering in Korean restaurants and as the base for low-ABV cocktails in bars that don’t have full liquor licenses.

What distinguishes shochu from other spirits is the utilization of koji (a fungus used in sake making) to convert starches in the base ingredient (barley, sweet potato, rice, sugarcane, plus around 46 other approved base ingredients) into yeast-fermentable sugars. Premium shochu is pot distilled and bottled at a higher ABV than soju.

“We carry the big brand of soju, Jinro. It does move,” says Huang at Grapes & Grains. The store carries baijiu as well. “From the perspective of an importer, shochu as a category seems to present some market potential within the spirits sphere, especially in light of the tailwinds created by Japanese whisky and, to a more recent extent, Japanese gin,” says Masahiro Takeda, vice president, Sanwa Trading Company/Wine of Japan Import, Inc. “This broader attention to Japanese spirits’ craftsmanship seems to have resonated with a large segment of the consumer market, spurring trickle-down interest in shochu, be it in straight consumption or in cocktail applications,” he adds.

In recent years, the Japanese Sake and Shochu Makers Association has made a concerted effort to engage the U.S. market at both the on-premise and consumer level.

Asia: Ancient Production Methods

Baijiu, the ancient and celebrated spirit of the People’s Republic of China, has so far proven a hard sell here in the U.S., although it has made a few inroads in bars and some retail shops.

Crafted according to a centuries-old tradition, baijiu is made from sorghum or other grains, which are soaked and steamed, then piled into stacks and inoculated with culture. The inoculated grain ferments in stone-lined pits sealed with mud for about a month, after which it goes through steam-distillation and the entire process is repeated several times, which can take up to a year. The liquor is aged for several years in huge terracotta urns and then blended before bottling at a very high proof. There are various styles of baijiu, each with distinctive aromas and flavors, ranging from light fragrance to sauce fragrance.

It’s an acquired taste, according to Bolton at Hi-Time, who likens the flavor to fermented tofu. The store carries 15 different baijiu brands, but most of that business is from online sales.

“While the category continues to grow within Chinese communities across the U.S., it is also capturing the attention of mixologists in some broad-market bars and restaurants,” says Yuan Liu, senior vice president of business development at CNS Imports. Liu believes that the best way for American consumers to approach baijiu is through cocktails, and then they can try it on its own. “The complex aromas and flavors of baijiu will appeal to consumers looking for unique experiences,” he says.

Thomas Henry Strenk is a Brooklyn-based freelance writer with over 20 years experience covering the beverage and restaurant industries. In his small apartment-turned-alchemist-den, he homebrews beer kombucha, and concocts his own bitters and infusions.

The post Which Exotic Spirits Will Trend in 2018? first appeared on Beverage Dynamics.