Jose Cuervo on protecting the future of Tequila

Proximo Spirits chief marketing officer Lander Otegui discussed the evolution of the Jose Cuervo Agave Project and how the brand’s large scale allows it to be at the forefront of sustainable advancements in Tequila.

Being the world’s biggest-selling Tequila brand (9.5 million nine‐litre cases sold in 2023), Jose Cuervo’s output in terms of sustainability can often be misread, where instead, smaller or newer independent brands are assumed to be the ones leading the charge.

In reality, Otegui explains to us: “When you look at who we are and what we know, I think it is sometimes mistaken for ‘being the largest is more damaging’ and for being industrialised, when it’s really just not true. We produce products at large-scale like Jose Cuervo, we produce high-quality Tequilas like Maestro Dobel, Reserva Familia, but scale is not contradictory with quality or sustainability. Having a large scale actually gains the ability to be much more invested in the space.”

He says that sustainability in Tequila is a “topic that sometimes gets overused” and that “a lot of brands use it without really showing how they’re using it or how they’re doing it”.

Adding: “I think that’s something that organisations, but also consumers need to be a little bit more critical about how they endorse and support the brands if they’re not telling you what they’re doing, because it’s becoming a little bit of a standard without having any factual information behind it.”

Thanks to its size and age (being the oldest Tequila brand in the world, founded in 1795), Jose Cuervo’s efforts in sustainability are done at the largest scale and are the most advanced, putting the brand at the forefront of the movement.

Otegui notes that “If you go to Tequila and speak with the people, we are probably the company that they’re going to tell you is doing the most, not only for the environment, but for the community as well.”

“For us, I think it’s a great opportunity because we’re at the forefront when it comes to not only support, but we’re actually in the communities too. That’s also a big part of who we are.”

Jose Cuervo’s scale allows the brand to do things that other producers simply that don’t capacity for, which Otegui explains in detail: “I would say the majority of the companies don’t own their own agave, or they don’t plant their own agave. This year we’re going to be close to producing our Tequilas with almost 70% of our own agave, which is very unique. It means that we have long-term contracts with agave growers, which in turn means they have a steady source of income from us.

“It’s very different from most other Tequila companies that are just buying at spot prices in the market. When agave prices are down, like today, they can buy at a very low price. That’s only hurting the agave growers, which is not the case for us as we are paying more and at fairer prices. We have planned long-term for that.

“We have multi-generational growers in our roster. We support them in the research we carry out on how to take care of the plants – how to grow and keep them healthy. This is all something we provide as well, for them to be more successful with our crops.”

360-approach

While looking after the land of Tequila and its people has been an integral part of the brand’s mantra since it was founded, Jose Cuervo committed to a programme called the Agave Project in 2019, which would open up this mission in a more consumer-facing way.

Central to the project is reusing the fibers from agave plants, bagasse, which look like hay and are leftover from the piñas once those have been extracted for their Tequila juice.

For many years prior to the project, composting leftover agave waste from the distillation (described by Otegui as “the most popular and the easiest” form of sustainability) has been done by the brand, as well using it to power ovens. But the fibers have also seen the hand of innovation, which Otegui says is being utilised in a way that is more consumer friendly, and being able for consumers to see and touch the actual products.

“We’ve been teaching this lesson on sustainability for many, many years, but this was the first time we’ve started communicating what we’re doing in a way that’s more tangible for people to see”, he says.

Moving away from just composting or using bagasse as fuel in the ovens, Jose Cuervo turns the fibers into various parts and products in aid of the local communities in Mexico; from houses to schools and the first-ever bar made from Tequila byproducts, as well as biodegradable agave-based drinking straws, parts for cars with Ford Motors and working with local artisans on crafts and clothing, which in turn gave them a space in Tequila to sell their products.

Additionally, there were collaborations on surfboards with San Diego surfboard shaper Gary Linden and guitars with Gibson, both 100% made from agave and a showcase of how Jose Cuervo is engaging in more sophisticated and advanced processes to find ways into the usage of the fibers.

The initiatives are also developed with intent of being scaled up, such as the straws, which the brand saw “massive success in”.

“We were getting a lot of requests from restaurants, bars, hotel chains and we gave them away”, Otegui says. “Any on-premise account can buy them, and we started using them in our events and music festivals where there tends to be a lot of single-use plastic and plastic waste. We also put them in value packs with agave-based shakers, which can be used at home.

“It’s another way for consumers to really get a sense of what agave can be. And we are also doing a major push on agave fibers for the clothing industry, which is something that we’ve seen in other other types of natural fibers. I think that’s something that can be scalable and something that consumers will appreciate.”

Otegui notes that Cuervo has “done pretty much everything that any other competitor has, but first, and without using it as a campaign – simply because it was right.”

“I think we see sustainability in a 360-approach rather than just what we do for agave, it’s more about what we do for the whole ecosystem, not just the production process.”

As other brands follow in its footsteps in trying to create this sort of circular economy, which Otegui says is “great”, he maintains that it needs to be a long-term commitment.

“I really hope that more brands start to support that community because when you look at the Tequila industry, most of the benefit, especially with the newer brands, is in American hands. Most Tequila brands are owned by international or American corporations, where as we are the only large Tequila brand that is really Mexican, and that continues to really support the Mexican communities, because for some of these brands, they might make a school but then if you ask them six months after ‘what’s happening in that school’, it was probably abandoned, or sold.”

“I think if people are committing to support, then this has to be for the long term and something that is not only there to sustain, but also something that can be scaled. So it is not just a marketing stunt.”

Water stewardship

While there is much focus on agave – and understandably so – water waste is an issue in Tequila that can slip under the radar in comparison, but one that Otegui highlights as “the biggest issue that I think we’re facing today”.

Of the challenge here, he queries: “How do you drain water if you’re not a company that has a skill that we have? And that’s what’s really difficult for medium and small sized organisations or producers, but that’s the biggest topic and the biggest issue that needs to be addressed.”

Making spirits in general requires a lot of water and Tequila is a dry area, which Otegui says is fortunate in the sense that “the agave plant doesn’t need a lot of rain water, so we don’t need to irrigate the agave crops like you do for corn or for other types of grains in other industries or in other categories.”

However, the process does result in a lot of water waste, which Otegui says Jose Cuervo is addressing through its state-of-the-art water treatment plants.

He says: “Historically, if you went to where Tequila production happens in Mexico, water was just discarding to rivers, and it was just discarded in a very, let’s say, unsustainable way. And piñas are the byproduct from the distillation process and the permutation process is not very-environmentally friendly. It creates a lot of damage to the rivers and to the mountains.

“For us, developing water treatment plants was a major initiative. It’s a very significant investment. We’re talking about something about US$100million to get those water treatment plants, which is something that we pride ourselves on. There’s very few Tequila distilleries that have water treatment plants.

“We are trading 100% of our water through them and we’re also using biogas, which is another very sustainable way to fuel our ovens, and that comes from the water treatment plants too. We’re using this energy, and we’re using this water, and we’re putting them back into our system, and also back into the environment in a cleaner way.”

The water treatment plants are installed at all the brand’s facilities in Mexico and remove 100% of vinasses (wastewater) generated from the Tequila production process.

As for the future of the agave project, Otegui says there will be a “much more measured and structural approach” to what Jose Cuervo will do.

“For us now, it’s a commitment that we’re putting out to the world, to our investors and to our ownership, where we’re saying we want Tequila to continue to be what it is today, for many generations. This is how we need to protect it.”

Jose Cuervo was named the Supreme Brand Champion in the 2024 edition of The Spirits Business’s The Brand Champions report.