The Making of PaQuí vs. Industrial Tequila

John Chappell set out to create a tequila that was smooth, flavorful, delicious and pleasant enough to sip. Getting there was a journey that required defying tequila industry norms and challenging one of the best Master Distillers in the world to take the PaQuí taste profile to new heights. What he ended up with, was a proprietary tequila that no distillery or brand can mimic.


An Interview with Founder John Chappell

What motivated you to create a premium tequila brand?

I always viewed tequila as a really interesting business opportunity but there was a motivating incident. I was in a bar with a group of colleagues and one of them sold the largest, high-end tequila brand. He ordered a round of shots. And someone took a picture of me as I threw the liquid down my throat capturing my facial contortion. And what went through my mind was, “wow, this is the biggest brand, worth a ton of money - there must be a way to make a better tequila.”

I was aware that there was a big market out there with very successful brands.  I approached it with an open mind very curious as to how these big tequila brands were not that good and selling at $40 to $50 per bottle. I had met I met a tequila insider, a Mexican living in California. He had the tequila connections because he imported low end tequila.  I brought marketing skills and the ability to create a brand.

So, how does one usually go about crafting a new tequila (the liquid)?

The interesting thing is that virtually all new brands need to find a liquid so they choose a distillery and simply take the liquid that the distillery currently makes. They're repurposing an existing liquid for their new brand. And this is standard practice that almost all brands go through when they create a new tequila brand. The brand is new, but the liquid inside is not.

How did you discover that most brands repurpose the distillery’s liquids?

When we finished the process of creating the PaQuí, brand, the name, the packaging, etc., we sat down as a group. The Mexican who had the tequila connections, a Master Distiller and an investor. We started discussing how we would get the liquid for PaQuí. I was just sitting back and listening to them and they said “we'll find a distillery that's not too big, not too small, take their liquid and make an adjustment or tweak using common practices in the industry.

I listened and then said, “wow we just spent nine months creating a brand and you want to use an existing liquid?” I was not buying it and raised my voice. We had just spent all this money on consumer research to create a beautiful brand and it deserved a liquid as distinctive as its branding. They were surprised at my vehement reaction and suddenly the liquid became my responsibility simply because I was the one who felt strongly about it.

If all these brands are recycling a few generic base liquids from the same distilleries, then how do they end up having different taste?

There are things that you can do if you go to a distillery and you use their liquid. You can pump oxygen through it. You can use additives. You can age in wood for a short time. There are all sorts of things going on in tequila, some of which are within the industry guidelines and rules and some of which are not. New brands using the base liquid of their chosen distillery is the standard, easily done and inexpensive.

Another sign of this was when we decided that we would use our own process the distillery that we chose was not happy. So, I went there and the son of the owner confronted me saying “what's wrong with our tequila?!” He poured a glass and slammed it on the table in front of me.

I tasted his liquid which was typical but nothing special. I politely told him “There' s nothing wrong with your liquid but if you don't allow us to make our own tequila in your distillery, we’ll go somewhere else. “He quickly backed down and we were able to use that distillery.

There's a third thing that indicates this is common practice. I was with an industry veteran who was around when one of the top three high-end tequila brands was created. He told me exactly what they did - how they went to a distillery and just used their liquid with an adjustment.

So how did you go about creating your own proprietary liquid for PaQuí?

I’ll tell you exactly what happened.  I didn't know how to create an outstanding liquid but the Master Distiller on the project, Gilberto, turned out to be very skillful. I asked Gilberto, “why are these leading brands that make up 90% of high-end tequila so mediocre?”  He didn't answer directly but suggested a solution. He asked me if I was aware that the blue agave weber had over 600 different aroma and flavor compounds as measured by a process called gas chromatography.

This came out of the blue to me. I thought about it and came back to him later saying if there are 600 different aroma and flavor compounds, some of them must be quite pleasing to the nose and the palate. Gilberto was making me aware of the huge potential in the agave ingredient and also hinting that most of that potential was being lost in the production process. So, I asked him to create a PaQuí liquid where the best of those 600 aroma flavor compounds would be present so you can smell and taste them in the final liquid that goes into the bottle.

Gilberto went to work and on his third try, I approved the liquid. I can't tell you how delighted and pleasantly surprised I was with the result. Gilberto gave me a big clue and I simply pushed him forward.

Can you explain how it tasted so different from the rest?

In my view, the big brands that dominate the market don't have things like pleasant aromas, or agave fruit, complexity or a soft finish. With PaQuí we have grassy, floral aromas really pleasant to smell before you taste. And when you taste you get a burst of sweet agave fruit and then vanilla and pepper. You have layers of flavor, complexity. And when you swallow, there's a real softness, even a mouth coating sort of texture to PaQuí. The softness makes it a pleasure to sip.

But how did you achieve creating a tequila that doesn't have that harsh, biting, burning taste?

There are four things Gilberto did, and the fourth one is the big one. The first key is that we use ripe, mature agaves 7 – 10 years old at a high sugar level. We produce in clean all stainless-steel conditions. We also use a fresh wine yeast with each fermentation to avoid off flavors from the thousands of airborne yeasts.

But the crucial thing that we do is take the distillation to a further point where we remove the impurities that cause tequilas to burn - the reason why people want to shoot tequila. After the PaQuí process, those impurities, congeners and fusel oils, are not in the final liquid. These impurities cover up all the best aspects of the blue agave masking the aroma, the fruit, the complexity, and they are the cause of the burn when you swallow.

Gilberto demonstrated this to me when I attended the first commercial production.  He directed me to a vat with a pipe coming up the middle and a receptacle motioning to me to stick my hand in there and taste the liquid. He didn’t warn me it would be so noxious, acidic and burning. He saw me get angry but then explained “John, that’s what we are taking out of PaQuí. And those impurities are in virtually every other tequila”. I finally understood from a visceral point of view how PaQuí achieved its profile.

As a consequence of separating out the impurities, the PaQuí yield is reduced by 15% making its production that much mor expensive than other tequilas.

Beyond the yield, what’s preventing other brands from creating a very similar tequila?

I asked Gilberto what's going to stop other distillers from basically copying our process? He had three answers. One was complacency in the industry where everyone thinks their tequila is the best.  The second is the lower yield which poses an economic issue to most brands. He also claims that it's very difficult to remove the impurities and that most Master Distillers do not know how to do this.

So, while other brands are repurposing liquids from the distilleries that they use, PaQuí developed a proprietary process that we own. Our tequila liquid appears in no other brand. The process is laid out in a document in Spanish that we guard.

Some brands talk about highlands & lowlands, is either better?

We’re able to produce in different parts of Jalisco. Some brands make a point of saying that there's a significant difference between tequila made in the Tequila Valley versus tequila made in the Highlands. We've made PaQuí in both areas and we've matched the profile. Gilberto believes there is not a significant organoleptic difference in agaves from these regions. As long as the agaves have the correct high sugar level we can match the taste.  We have flexibility of producing in the Tequila Valley or the Highlands.

What do you think about the current state of the high-end tequila market in the US?

It’s a fast growing and sizable segment dominated by enormous brands backed  by corporations with huge resources . The industrial and celebrity brands are nothing special in term of taste profile but are ubiquitous from heavy marketing. Tequila drinkers are not yet generally knowledgeable or aware that a brand like PaQui can offer elevated quality and a much more enjoyable taste.

PaQui has to separate itself from the pack as a luxury brand for drinkers who value quality and taste. And access more capital to get the word out to drinkers and expand its presence in the market.