Good Morning! This weeks newsletter has a very interesting tone and theme to it. Its a little grim but I think currently the spirits and food and beverage industry is all kind of feeling that anxiety, and as much as id love to pretend everything is sunshine and rainbows, unfortunately I cannot.

But its not all scary headlines and crazy things, we got a lot of in depth coverage as well as a great last holiday gift guide for the year! Also! If you’re into tiki cocktails or Mai Tai’s I released this video last week making 10 different Mai Tai Variations!

Anyway, on to this weeks newsletter.

Craft Spirit's & Cocktail Bars: Is The Party Over?

Remember those days when you'd sidle up to a bar and the bartender would pour you a taste of some obscure, small-batch whiskey you'd never heard of? Yeah, those days might be numbered. Punch just dropped a sobering piece about the shifting relationship between craft cocktail bars and craft spirits, and it's not exactly a rosy picture.

Apparently, the love affair is fading. It's not that bars don't like craft spirits anymore, it's that they can't always afford them. Between rising costs and customers balking at pricey cocktails, bar managers are often forced to choose between a $40 bottle of artisanal gin and an $18 bottle of the mass-market stuff. Guess which one usually wins?

And it's not just about the money. Some bars are so focused on creating elaborate, Instagram-worthy cocktails with house-made ingredients that the base spirit almost becomes an afterthought. That's bad news for small distilleries who rely on bars to get their name out there.

But don't despair just yet. The article also highlights some distilleries who are finding creative ways to stay relevant. They're focusing on educating bartenders about their products, offering incentives, and even partnering with sommeliers to reach new audiences.

Our Take: So, is this the end of craft spirits in cocktail bars? Probably not. But it's definitely a wake-up call for small distilleries who need to adapt to a changing landscape. And for those of us who love discovering new and interesting spirits, it might be time to start exploring beyond the cocktail list.

Last week we highlighted the emerging trends for 2025, but one trend that we seem to be seeing everywhere is how expensive it has become to run a cocktail bar. And this is just another data point showing us that.

Tariffs & Tequila: The Hangover May Hit Hard

The agave spirits category, once a beacon of growth in an otherwise stagnant drinks industry, is facing new challenges. While tequila and mezcal continue to gain popularity worldwide, recent data suggests that the tequila boom in the US may be losing some of its momentum. This shift, coupled with the looming threat of tariffs on Mexican imports, has cast a shadow of uncertainty over the future of agave spirits.

A recent report from IWSR reveals that while agave spirits continue to thrive globally, tequila's growth in the US is showing signs of slowing. Those impressive double-digit growth figures are becoming a thing of the past, with overall tequila volumes dipping in the first half of 2024.

But its not all doom and gloom, according to them the “premiumization” trend remains strong. While sales of lower-end tequilas are softening, high-end expressions like cristalinos and other fancy looking bottles continue to see healthy growth.

Meanwhile, mezcal, with its smoky allure and artisanal appeal, remains the darling of the spirits world, poised for a predicted compound annual growth rate of 10% over the next few years.

However, a looming threat could disrupt this positive outlook: tariffs.

Proposed trade policies by the incoming US administration could impose a 25% duty on all Mexican imports, including tequila and mezcal. This has sent shockwaves through the industry, with experts predicting significant job losses, reduced tax revenue, and increased prices for consumers.

A new report from the Wine & Spirits Wholesalers of America (WSWA) paints a grim picture, highlighting the potential consequences of these tariffs. The WSWA predicts massive job losses, a decline in tax revenue, and a significant hit to the overall economy. They express particular concern for single-origin products like tequila and Scotch, which cannot be easily produced elsewhere.

What does this mean for the future of agave spirits?

This potential trade war raises critical questions about the future of agave spirits. Will the premiumization trend be strong enough to offset the impact of tariffs? Can mezcal maintain its impressive growth trajectory in the face of rising prices? And how will consumers react to a potential tequila price hike?

The answers remain unclear. But one thing is certain: the agave spirits category is at a crossroads. The decisions made by brands and policymakers in the coming months will be crucial in determining the future of tequila and mezcal.

Holiday Gift Guide! Bottles You Should Give as a Gift!

Every week from now till Christmas, I will be putting together a small list of recommended items I think would make good gifts for the cocktail / spirits lovers and each week will be themed!

Also, these are not affiliate links. I am too lazy to set those up. If in the future there are some affiliate links, I will let you know. These are just things I think would be insanely useful.

We’ve covered the Useful gifts, we’ve covered the best books, we’ve covered fun random gifts, and today we are finally going to go over bottles that I think would make a great gift!

Of course, these may be hard to find but i think they are worth it as they are quite special. I have not selected insanely hard to find and premium bottles, just ones that i think would make great gifts.

For the Tequila Lover: I could easily just say the Fortaleza Winter Blend 2024, but you guys may never see that bottle and you get annoyed at me. So instead another bottle that I think is very special and well worth it to give as a gift would be: Tequila Ocho Puntas 2024! Special edition but shouldn't break the bank.

For the Whiskey Lover: St George’s Single Malt. Easily one of my favorite whiskeys ever, and I love what St. George produces. And their single Malt happens to be my absolute favorite they produce. They do them in lots and not every single year, and every lot is different from the last.

For the Aspiring Bartender: Green or Yellow Chartreuse. I know. Also hard to find, but if you find a bottle it'll make for a perfect gift for that bartender to finally be able to make all of those classic cocktails that call for it. I have yet to find a true replacement for them in cocktails.

An after dinner drink that also makes incredible cocktails: Amaro Nonino. This Amaro is very herbal and complex, makes for a delightful digestif but also a key ingredient in Paper Planes.

For an out there experimental bottle: Novo Fogo Tanager. This cachaça (Brazilian fresh sugar cane rum) that was aged in Zebrawood. I know lots of crazy words there. Cachaça is one of the only spirits on the planet that can be aged in 28 different kinds of wood, with each one imparting a different flavor. If you want to get a well made but funky weird bottle for that spirits nerd in your life, I think this would make an incredible gift.

Best Video We Saw This Week:

My friend Jordan always kills me with his videos and that one made me have a hearty laugh (okay, I blew some air out of my nose and chuckled but you get the point)

“Skinny” Drinks have always been funny to me. Cocktails are empty calories, either drink a vodka soda, or tequila soda, but why would you want a crappier version of a cocktail like a margarita?

Anyway, this is funny.