Volume 5 | Issue 1 | Year 2009

Operations for Casa Herradura, a leading producer of tequila, take place at San José del Refugio, a hacienda dating back to 1870. Fields full of blue agave plants, the key ingredient needed for tequila production, surround the hacienda. “All of the tequila produced at Casa Herradura is made from 100 percent tequilana weber blue agave,” explains Jesús Martínez, director of the brand el Jimador at the company.
To make tequila, workers at Casa Herradura rely on traditional methods that date back hundreds of years. The agave plants are harvested by hand, and then placed in stone ovens to bake. Long-established methods are used during the distilling and bottling steps, which are all carried out at the hacienda. “This process results in a rich, smooth, unexpected flavor that brings back memories of our agave fields,” Martínez notes.

A LEADER IN TRADITIONS
According to Martínez, Casa Herradura is one of the oldest and most respected tequila producers in its industry. Company operations began in 1870 at the hacienda San José del Refugio, located just outside of Amatitán, a small town approximately 35 kilometers from the city of Guadalajara. The hacienda is situated in the state of Jalisco, which lies in the heart of Mexico’s tequila-producing region.

Today the company places a high value on the traditional methods used to make tequila. Its leading brand, el Jimador, comes from the name given to artisans that harvest agave plants. The artisan, or jimador, uses a special tool that consists of a long wooden handle and a sharp circular blade. The worker cuts off the leaves of the agave plant to reveal its core, which can weigh up to 150 pounds. The core is then used to produce tequila.

In addition to harvesting agave plants by hand, Casa Herradura has taken other steps to remain grounded in its heritage. “While the competition now uses modern methods to make tequila, we still rely on our antique ovens and traditional processes in combination with the latest technology,” says Martínez. “Our methods result in the most authentic tequila available.”

Casa Herradura also places a special emphasis on producing tequila that is made from 100 percent blue agave plants. This means that during the fermentation stage, agave juice is mixed only with water. It is then fermented and distilled. Other companies in the industry often create a mixed product, which is made by fermenting and distilling a blend of agave juice with other sugars and water. This reduces the amount of actual agave in the final product.

The special attention to tradition and quality at Casa Herradura has helped the company grow significantly over the years. Today it is the third largest tequila producer in the world. Its top brand, el Jimador, is the number one selling tequila in Mexico. It has held this position for the past eight years. The company sells approximately one million nine-liter cases of el Jimador in Mexico every year.

In addition to el Jimador, Casa Herradura produces a number of different premium tequila products. The company’s namesake brand, Herradura, comes in four varieties: Herradura Silver, which is aged in white oak barrels for 45 days; Herradura Reposado, which is aged for 11 months; Herradura Añejo, aged for 25 months in white oak barrels and Selección Suprema, which is aged for 49 months.

Casa Herradura also produces a drink called New Mix, which is a ready-to-drink beverage containing el Jimador as a base. “In the last five years, New Mix has become the best-selling ready-to-drink beverage in Mexico,” notes Martínez. “We sell about 4.5 million cases, each containing nine liters, of New Mix on an annual basis.”

Martínez is not surprised at the popularity of New Mix in Mexico. “Among Mexican consumers, 77 percent prefer to drink tequila as part of a mixed drink,” he notes. The most popular mixed drink with tequila is known as a paloma. It contains tequila and grapefruit-flavored soda. “New Mix is really a paloma that comes already mixed and bottled,” Martínez adds.

Mexico and the United States are the company’s main markets. In Mexico, approximately 100,000 palomas are consumed each hour. In the United States, where margaritas are the most popular way to serve tequila, an estimated 200,000 margaritas are consumed each hour.

INTERNATIONAL LEADER
In January of 2007, Casa Herradura was acquired by Brown-Forman, one of the largest American-owned companies in the wine and spirits industry. Brown-Forman employs approximately 4,500 people around the world. 1,300 of those employees work at the company’s headquarters in Louisville, Ken. An estimated 1,000

The deal with Brown-Forman created a number of opportunities for Casa Herradura, especially in the international market. “Prior to the acquisition, we distributed to 53 countries. Now we are able to distribute to 135 countries,” Martínez explains.

Currently, the tequila industry produces a total of 300 million liters of tequila each year. Of that total, approximately 135 million liters is exported annually. The vast majority of the tequila exported goes to the United States and Casa Herradura will be one of the main players in the coming years.

The acquisition also gave Casa Herradura access to a wider range of products. “Our products are mainly tequila-based; however, we now distribute other products as well, such as Jack Daniels and Southern Comfort,” says Martínez. “It has really given us an ample portfolio to work with here in Mexico.”

In terms of production, Casa Herradura is now able to participate in a large, global enterprise in the wine and spirits industry. “Before the acquisition, we produced about 1.2 million cases of tequila each year,” says Martínez. “Now we are part of a company that distributes 30 million cases on an annual basis.

Casa Herradura has set a number of high goals for its products during the coming years. “We want to make our brand Herradura Reposado become the top-selling premium tequila in Mexico,” notes Martínez. The company is also working on strategies to increase sales for Herradura Reposado in the United States, making it one of the top choices for consumers looking for premium tequila.

Casa Herradura also has big plans for its brand el Jimador. “We want to see el Jimador become the top-selling tequila in the world in the next 10 years,” Martínez explains. He notes that the current top-selling tequila is not made from 100 percent agave, but rather is a mixed tequila. Since el Jimador contains 100 percent agave, company officials plan to use this as a competitive edge to help boost sales in the next years.

The company has recently received worldwide recognition for its dedication to tradition, heritage and quality. It was named “2007 Best Distiller of the Year” by Wine Enthusiast magazine. Casa Herradura was the first tequila company to be awarded this prize.

In the coming years, company officials at Casa Herradura plan to continue carrying out the traditional methods used to make tequila. As the company increases its sales both in Mexico and in the international market, its premium tequila will gain further recognition for its taste and high quality. Casa Herradura’s lasting success shows that, sometimes, upholding tradition can turn out to be the most innovative strategy around.

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