(Bloomberg) -- “Handcrafted” isn't providing the marketing advantage it used to before the coronavirus pandemic -- at least when it comes to one of the world's best-selling brands of tequila.
Chronic shortages of Patron, a liquor made in Mexico, will probably continue well into next year as the brand's slow, painstaking production goes up against soaring demand for booze with more people staying home to drink, said Adrian Parker, vice president of marketing for Patron Spirits International AG, which Bacardi Ltd. bought for $5.1 billion in 2018.
Patron's human-intensive “handcrafting” process, coupled with social distancing measures to slow the spread of the virus, has turned the method that gives the booze its elite reputation into “a business risk” in the time of Covid-19, Parker said. Prices of Patron haven't increased this year despite the need to hire and train more employees due to social distancing.
“The word craft has become a cliché, but the work of handcrafting does present a risk,” he said.
That's a challenge for the expanding high-end market. Premium tequila has been on the rise for years, with volume consumption up 15% each year between 2015 and 2019, according to researcher IWSR.
Patron's usual production measures already take 25 times longer to produce and bottle tequila than that of rivals' automated distilleries that use machines, Parker said. Now social distancing at its sole factory in Mexico has made productivity drop by more than 50%, he said, just as the pandemic pushed up consumption 52%. That's prompted shortages in as many as 10 U.S. states.
“For the next few months, going into the next calendar year, we'll certainly have to manage some outages and some supply issues,” Parker said. The company has added about 200 people to its factory workforce of 2,000 to help boost output.
©2020 Bloomberg L.P.
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