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Tequila production surged dramatically between 2018 and 2023 as US demand boomed. By 2024, signals of agave oversupply and softening US export demand began to emerge. A 2026 production decline would confirm the tequila category has entered the same correction cycle that now afflicts bourbon.
The CRT is the Mexican regulatory body that certifies and tracks all tequila production. Annual production figures have grown steadily since 2010, reaching record levels above 500 million liters in recent years. The agave plant takes 6-8 years to mature, meaning production decisions made in 2018-2020 are determining current distilling capacity. Signs of agave surplus and weakening US export orders suggest the production peak may be near.
Tequila's explosive growth in the US market between 2015 and 2023 drove Mexican agave planting to historic highs. Farmers and cooperatives responded to surging demand by dramatically expanding agave cultivation, with millions of additional plants put into the ground between 2016 and 2021. Those plants are now maturing, creating the conditions for a potential agave glut.
Meanwhile, the US demand picture is shifting. After years of double-digit volume growth, tequila's US expansion rate slowed measurably in 2024. Premium and ultra-premium expressions, which drove most of the value growth, faced pricing resistance as consumers pulled back on discretionary spending. Several importers reported reduced forward order books from US distributors.
CRT production data, released annually, is the definitive metric for the category. Total tequila production reached approximately 536 million liters in 2023, a record. For 2026 production to decline, distilleries would need to reduce run rates in response to reduced export orders or agave pricing dynamics.
The Mexican government and the CRT also influence production indirectly through certification requirements and geographic denomination controls. Any regulatory tightening on agave sourcing or production standards could accelerate a volume decline. The most likely resolution path is gradual rather than sharp: a 1-5% decline rather than a dramatic correction.
YES if the Consejo Regulador del Tequila annual report covering calendar 2026 production shows total tequila liters produced below the 2025 figure. NO if 2026 production is flat or above 2025.
Mexico produced approximately 536 million liters of tequila in 2023, a record. Production has grown nearly every year since 2010 as US demand accelerated.
The Consejo Regulador del Tequila is the Mexican certification body that regulates all tequila production. It publishes annual and monthly production data covering all certified distilleries in the designated tequila region.
Agave plants take 6-8 years to reach harvest maturity. This long cycle creates boom-and-bust dynamics: planting decisions made in response to 2018-2020 demand levels are now creating agave availability that may exceed 2026 distillery needs.
Brands with the highest volume production and US export concentration are most exposed. The top-10 tequila brands by US volume, including Jose Cuervo, Patron, Herradura, Espolon, and Cazadores, collectively represent a large share of CRT-tracked production.
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