Financial evaluation of agave and mezcal production: case study Caltepec, Puebla

Abstract

In recent years the production of agave distillates in Mexico, including mezcal, has become increasingly important. In the period 2013-2019, its value has increased to an average annual rate of 19.76%. Such behaviour has been driven by product prices and increasing domestic and international demand, compared to the latter concept from 2017 to 2018 mezcal exports grew at a rate of 34.40%. This has led to more and more productive units linking to the agave value chain, as has been the case of the municipality of Caltepec, Puebla, whose population is in poverty and lives on agriculture. In this sense, it is necessary to analyze the opportunities that agave and mezcal production could generate, to provide productive opportunities that seek to improve the municipal economy. Based on the above, a financial assessment was developed from 2020 with a planning period of eight and 15 years from the start-up of the project. Research findings suggest that both types of business opportunities are financially feasible, because have a net present value of $34 074.09 and $1 911 792.96, respectively. They can therefore serve as potential alternatives to improving the wellness of different productive units in the region, thereby helping to alleviate local poverty.