During almost two decades as Casa Sauza's director, I have seen the growth of the industry and noticed that each of the different stages of our development have brought different challenges. The tequila industry challenges go from estimating the future demand and well as the commercialization of our products with new markets, to the integration of innovation and technology to our processes and products. Do you want to know which challenges are coming ahead?
Casa Sauza Challenges in the Tequila Industry
The tequila industry has an interesting challenge these days, which is to diversify its markets. So far, we have been focused on the US and Mexican markets for around a 90%. The US market has been growing and thriving however, in such a globalized world, we can always open to new growth opportunities. In order to achieve this diversification, we must look for other markets and truly commit with them in terms of growth. This search represents an important challenge for the industry within the globalization plan.
Although the spirits industry has grown a lot if we see if from a global point of view, the tequila category is still small in terms of our participation at a global level. From the total amount of the spirits category, the tequila industry represent approximately a 1%. Yet, in terms of volume, the amount of tequila that is being exported is not that bad, since we are currently in the 5th place within this category. Our drink has played a good role and has given a good image on an international level. We have managed to give that value to the richness that the tequila offers itself, long with the whole Mexican gastronomy, which is very rich and varied.
At Casa Sauza, we are betting on the growth of our market diversification, as well as of our premium segments, in a very competitive and productive way.
Casa Sauza Challenges in the Tequila Industry
One of the challenges that we have is that the company is 145 years old and throughout our history, we have had a legacy of several important people participating in it, starting with the Sauza family. We have ever since, been innovating in the industry's processes and commercialization. Therefore, we must keep up with this legacy and direction.
These challenges have taken us to innovate in many aspects. For example, one of our challenges has been that, since our storage space is limited, we've been forced to make our processes more efficient. We are committed to our region and our people, so we do not want to expand ourselves to other places or regions. In order to optimize our growing production without having to expand our current facilities or grow in some other region, we decided to carry out a mayor improvement so we wouldn't have to store finished products. This system that we implemented is called Just in Time.
This philosophy is not very common within our sector and we are probably the only ones from the industry who carry it out. Thanks to this system, we don't have any finished products inventory, nor do we have cellars to store packed products. This is how we make the most out of the space that we have, since we want to keep operating in Tequila Jalisco in a consolidated way.
The other project that we are interested in, is in keep promoting our tequilas culture in the touristic branch. As the great tequila producers that we are, we are the only ones who are actually doing the packing-of-origin from the Tequila town. We want to open this packing experience to the public in general and to the tourism as well, This project has its challenges in terms of guaranteeing both our visitors safety as well as the innocuousness of our processes. Still, we are working on a plan to get it all worked out and thus, enrich the experience of our visitors.
Casa Sauza's Innovation Challenges
In terms of innovation, we are working from the production of the agave to the final delivery of our product. We rely on the collaboration of our suppliers and we want to start having more collaboration with our clients in terms of managing inventories. Technology allows us to have timely and accurate information in order to optimize inventories.
These inventories represent an important cost to our industry since time is a key aspect that we offer in our products. The time that the Agave plant spends in the field goes from 6 to 7 years. Then, when we turn the agave into tequila, the time process goes on, and so it does when it comes to resting our spirit. Our products rest for at least 2 months in wooden barrels and, depending on each product, they might even rest for a little more than a year, as our vintage products do. So it takes at least 6 years to produce a young tequila and up to 9 years to produce a extra-vintage one. We must therefore optimize our resources, from making sure that we can count on our agave supply for following 6 to 7 years, to managing the space, time periods and movements so we don't have surplus inventories.
In order to improve our premiumization, we must optimize our processes to the fullest by making use of the current available technologies and the ones that are still to come. We now have premium brands that we've managed to produce in a most optimal way and we want to share our experience.
As you can see, our challenge is to estimate our future demand, the one that we will have in 6 to 9 years, and being able to foresee where will Casa Sauza be at in the future, by taking into account the market's growth and the possible challenges and restrictions that we might have to face then.
These changes might come in the shape of different lifestyles, uses and traditions which in the end, might affect the consumption of the spirit. If it all stays the same, we would not face any problems but, we do live in a very changing and dynamic world, some of the changes are predictable and other are just not. So we are currently working on the risk management of our supply.
We have managed to carry out a continuous improvement culture thanks to the close collaboration that there is among all of our company's departments, as well as to the commitment that our collaborators have shown towards our project.
Technology at Casa Sauza and the Environment
As I have previously mentioned, technology at Casa Sauza is an important tool in order to keep innovating. We are very interested in that techology that has to do with the conservation of the environment. How can we pollute less and give back to the environment? Since in the end, by thaking care of the environment, we are taking care of ourselves.
Thanks to the technology that we have, we do recycle 100% of the waste that we produce. The most substantia waste that the tequila industry produces is vinasse, which is produced when separating the alcohol from the rest of the elements of the tequila production process. For example, the agave's fiber and different components that are no longer used once we extracted the alcohol; If they are only left behind without being treated, they obviously pollute the environment. We are currently reprocessing all of our vinasse by means of our water treatment process, which not only we later use to water our fields but we are also close to turn it drinkable water as well. All of our waste fiber goes into a compost and its given the chance to be re-used for other purposes since there are other environmental-caring industries who demand green products, such as our composts, for their own projects.
So, on one side, have the technology needed in order to constantly decrease the amount of waste we produce and, on the other side, we try to recycle the waste we do produce. This is a subject in which we have strongly worked and invested on and intend to keep on working on it.
Water at Casa Sauza
We want to optimize our water consumption and use it only when it is indispensable to do so, since it is vital for sustaining life. By caring about water, we care about our ecosystem. Water is one of the most important elements of our product. Here at Tequila, there is a beautiful oak forest which, next to the Tequila volcano and the hills nearby, feed all the water wells with which we make our tequila. This is why it is even more important for us to care for this natural resource.
Water is the most important element in our product. 60% of tequila is water, and thus, it gives it very particular characteristics. Our tequila's water comes from these woods and from the volcano with a very low and acid PH level, which provides the characteristics that only this land and region can imprint on a tequila. We also have to take into account the mineral drag that is combined with all the elements and thus, provide the specific aromas and sensory characteristics that are exclusive to our tequilas.
Our challenges will always be in the continuous improvement area and in being aware of the ever changing conditions that the markets bring. This is why when working on optimizing water, recycling, lowering energy consumption, and exploring renewable energy sources, we are at the same time working on being able to compete in a globalized world while also giving our customers the best and most pure tequila they can find in the market.
Come and visit Casa Sauza and see for yourself how the modernization of our production processes delivers the purest tequila that you will find in the market.