Having made billions on tequila, Patrón creators turn to vodka
Agave-based vodka is the new big bet being made by the global tequila giant – but how do you do it? Kara Newman reports.
When Bacardi Ltd bought Patrón Spirits International AG for US$5.1 billion (NZ$7.2b) in 2018, the partners who put together the tequila juggernaut weren’t sure what would come next.
“We had that cliche: Boy, we’d love to get the band back together sometime,” recalls Lee Applbaum, then Patrón and Grey Goose chief marketing officer and now president and chief operating officer of Round 2 Spirits. “Over the years that followed, we were all doing our own things, but keeping a watchful eye on the industry.”
The opportunity they were waiting for? Agave-based vodka.
Round 2’s Weber Ranch 1902 started selling this week exclusively on ReserveBar, the online spirits marketplace, for US$27.99 (NZ$46) for a 750ml bottle. It will roll out to brick-and-mortar retailers later this month.
The name refers to blue Weber agave, the species used to make tequila, and 1902, the year French botanist Frédéric Albert Constantin Weber first catalogued the plant during an expedition to Mexico.
“We believe that the vodka consumer is long overdue to have something new,” Applbaum says. “There has been a real stagnation of innovation in vodka.”
Not everyone will agree with that statement, since vodka has been distilled from pretty much any ingredient you can find (think: whey, olives, carbon dioxide, stale doughnuts). Weber Ranch was founded on the idea that agave-based vodka is what the thirsty masses are missing.
Maybe the brand’s creators see something the rest of us don’t: Patrón arguably lit the fuse for today’s tequila boom.
Founded in 1989 and branded as a luxury spirit, it attracted mass-market attention to tequila; in the 1990s and early 2000s, some consumers recognised the bottle shape and ordered it by name without even realising they were asking for tequila.
Patrón’s phenomenal success set the stage for celebrity spirits and today’s widespread enthusiasm for tequila and mezcal.
Besides a handful of smaller craft outfits, actor Dan Aykroyd’s Crystal Head is the only major vodka maker to utilise agave in production. Its Onyx expression – also made with blue Weber agave – premiered in 2020, in a bid to lure legacy agave drinkers into the vodka fold.
Commodity swings
Vodka remains the bestselling spirit, both in the US and globally, with tequila nipping at its heels; experts predict 2024 will be the year it overtakes it.
Vodka sales in 2023 were little changed from a year earlier, totalling US$7.2b, while tequila and mezcal sales surged 7.9% to US$6.5b, according to the Distilled Spirits Council of the United States.
According to Applbaum, the idea of wading into the crowded segment with an agave vodka, to play “at the intersection of two massive, massive categories”, has been unfolding over the past couple of years. The recent crash in stratospheric agave commodity prices just happens to be fortuitous timing.
Agave prices in Mexico reached a record 32 pesos per kilogram (US$1.90/kg) only 18 months ago, but by February they’d plunged to 5 pesos a kg, according to an April report by drinks market analysis firm IWSR.
Prices are expected to bottom in 2026 given newly planted agave’s multiyear growth cycle.
When asked about weathering further supply chain spikes, Applbaum shrugs it off, saying of the group’s Patrón years: “We got a PhD.in agave and agave spirits.”
Making vodka from tequila
Weber Ranch production will take place both in Mexico and in the US.
The agave will be harvested from a variety of fields in Jalisco, then fermented, distilled and certified at NOM 1619 (Norma Oficial Mexicana, or “Official Mexican Standard”), which makes a handful of tequilas that are mostly for domestic consumption.
At this point the distillate is, for all intents and purposes, tequila. Except it then gets transported to Muenster, Texas, where Round 2 turns it into vodka.
The group has taken over Whiskey Hollow Distillery, which declared bankruptcy last year, outfitting the facility with a custom still, cooling towers, a new bottling line and myriad other improvements.
“It’s in essence a brand-new distillery in the shell of a former one,” Applbaum says.
There it will undergo a second distillation and be cut with aquifer water. Multiple distillation is one of the hallmarks of vodka, creating a more neutral flavour profile.
“Let’s face it: A vodka drinker doesn’t want to drink tequila. If they did, they’d drink tequila,” Applbaum says of stripping much of tequila’s honeyed, cooked agave flavour from the distillate.
And vodka is “much more malleable” in terms of being used in cocktails including espresso martinis and cosmopolitans or even ranch water (the original consists of tequila, sparkling water and lime, so swapping in vodka would yield … a vodka soda).
Weber Ranch isn’t completely neutral, though; by design it’s part of a growing trend toward vodkas with character, including earthy potato vodka from Poland’s Chopin or the nuanced spice of single-estate rye vodka from Belvedere.
A taste test reveals a distinct vanilla sweetness on the nose and palate, as well as a weighty, almost syrupy texture. Fans of cristalino tequila (a sweetened, clear tequila style) may enjoy this particular vodka.
“This might sound corny, but we wanted to honour the agave plant,” Applbaum says. “We don’t want to select this noble plant that takes almost seven years to grow, do all this hard labour and end up with a product that’s not differentiated from a commodity crop, like wheat or corn.”
The ultimate challenge: Can one bottle draw consumers in both of the two biggest spirits categories?
Weber Ranch is betting on it. The delicate flavour profile should appeal to vodka drinkers, Applbaum says, “and the agave consumer should be able to say, ‘Aha, I got it’”. – Bloomberg