Young Australian drinkers driving sales spike of Mexican blue-agave spirit tequila

One tequila, two tequila, three tequila, floor.

The infamous Mexican spirit may have caused countless hangovers, but a new generation of tequila drinkers are driving record sales in Australia, the third-largest per capita consumer of agave-based spirits after Mexico and the US.

Top local bartender James Connolly, who has mixed margaritas and palomas in Perth venues including El Publico in Highgate, Long Chim in the city and his own bar Bertie in Bassendean, says tequila can be a “polarising” beverage — especially for people who have had a bad experience.

However, Perth drinkers are embracing high-quality agave-based spirits, in particular, premium or artisanal mezcal and tequila.

Mezcal can be made using different agave plants while tequila, which is a type of mezcal, must be distilled from Weber blue agave.

“I think people are better educated about tequila,” Mr Connolly said.

“There’s still plenty of people that can’t look at or smell a tequila because it brings back a trauma response.”

As with the champagne appellation, only tequila from the Mexican town of Tequila or the surrounding Jalisco region can be called tequila.

Often mistaken for a cactus, the spiky agave plant is a succulent that thrives in rocky, mountainous environments.

Sarah Hall, head of spirits for the Endeavour Group which owns the Dan Murphy’s and BWS bottle shop chains, says tequila has enjoyed a sales spike in recent years.

“Sales of agave-based spirits have doubled since 2020, with the highest share gain of any spirits subcategory in the past five years,” she said, adding that tequila is up 10 per cent versus a year ago, overtaking brandy in market share.

Ms Hall said new products and local brands, such as Agave Australis and Act of Treason, are bringing younger customers to spirits. More than 60 per cent of people buying tequila are millennials.

Re Store spirits, liqueurs and beer manager Anastasia Berti has noticed increased sales of agave-based spirits at the Leederville store.

“Tequila has taken off over the past few years, in particular, top-end products in the $90-$150 range and even bottles costing more than $200,” she said.

“We think that consumers are becoming more knowledgeable about the different styles, such as blanco, reposado and anejo, and are willing to spend a bit more to get a much better bottle.”

Ms Berti said “cult” tequilas such as Clase Azul and Don Julio 1942 sell strongly, as do tequilas owned or promoted by celebrities, including Dwayne “The Rock” Johnson’s Teremana, Kendall Jenner’s 818 Tequila and Casa Migos, which George Clooney co-founded but is now owned by spirits behemoth Diageo.

Australian companies are also gunning for their slice of a domestic market for agave-based spirits valued at more than $250 million in 2024 and estimated to surge to around $338m by 2028, according to drinks industry analysts IWSR.

Dominated by US sales, the global market is worth north of $20 billion.

Andrew “Twiggy” Forrest’s agriculture business Harvest Road plans to produce an agave spirit made from plants grown on his Brickhouse Station in the Gascogne.

While Australian brands such as Blacksnake Distillery in NSW and Far North Queensland’s Agave Australis make boutique products, Queensland-based Top Shelf International is the first to commercially launch an agave-based spirit nationally.

In July last year, TSI unveiled its First Harvest Blanco in Dan Murphy’s stores across Australia.

The spirit is made using agave grown on TSI’s farm at Eden Lassie in the Whitsundays, which is 20 degrees south of the equator and has a similar climate to Jalisco, which is 20 degrees north.

TSI chief Trent Fraser said the farm currently has 620,000 “thriving” agave plants in the ground.

“When they said you couldn’t grow grapes to make wine here in the 1950s, we went and did it anyway and we feel the same for Aussie agave spirits,” he told The West Australian.

Mr Fraser added that sales have exceeded expectations, and he sees a bright future for Australian-made agave — especially if US President Donald Trump’s tariff plans drive up the price or dries up the supply of Mexican products.

“If the US wants to have long, expensive trade wars with places like Mexico, Aussie agave is ready to fill that gap,” he said.

“We have the climate, we have the culture, now we have the plants and a world-class product.”

Mr Fraser believes Australian agave has the potential to be “this country’s next great spirit category”.

Mr Connolly said he has tried a few of the home-grown brands and described them as “good” but not a substitute for top-shelf mezcal.

“It’s not like I haven’t tasted worse stuff out of Mexico,” he added.

James Connolly took over the bar at El Publico to make one his favourite cocktails — a “refreshing, delicious and very approachable” pineapple and passionfruit paloma.

Here is his recipe:

45ml Teremana blanco tequila

15ml passionfruit puree/pulp

10ml agave syrup

15ml lime juice

Shake and strain into a highball glass rimmed with chilli salt

Top with pineapple soda

Garnish with a mint sprig and half passionfruit