The Tequilero Who Made Patrón a $5.1 Billion Business
Bloomberg Businessweek|August 06, 2018

Master distiller Francisco Alcaraz crafted the agave spirit that changed tequila forever. Will Bacardi dilute it?

Ted Genoways

One day in 1989, Francisco Alcaraz, then the mas-ter distiller at Tequila Siete Leguas, was leaving the company’s twin factories in Atotonilco el Alto when a man wearing sunglasses and a half-unbuttoned shirt called out to him. “Can you help me?” the man asked. Atotonilco is a quiet village, with few outsiders, in the highlands of the western Mexican state of Jalisco. To this day, Siete Leguas sits on a hilltop side street so untrafficked that the gate of its brickwork facade is often left open. It was unexpected to hear anyone speaking English there, let alone a tan, barrel-chested American dressed all in black, like Johnny Cash. The man asked Alcaraz if he knew the distillery’s owner. Of course, Alcaraz said. Lucrecia González, the late founder’s daughter, was his boss.

Right on the street, the man introduced himself as Martin Crowley and started explaining what he was doing there. Alcaraz, who’s partial to a pompadour and black leather jackets, couldn’t help but be intrigued—there’s not a lot of excitement in Atotonilco. Crowley said he was a fan of Chinaco, a high-end tequila introduced to the U.S. market two years earlier. Chinaco was as popular as it was tough to find—it was such a hot commodity, border bandits had hijacked a shipment crossing into Texas.

Crowley saw a market opportunity—a high-end tequila that wouldn’t be hard to get hold of—and came to Mexico hoping to start his own brand. He’d heard that cousins of the González family, who were behind Chinaco, produced Siete Leguas. Crowley told Alcaraz that he wanted to contract with Siete Leguas to make the best tequila in the world. “I said, ‘I can’t promise that,’ ” Alcaraz recalls, explaining that he told Crowley how different palates prefer different flavor profiles and how changing moods or even time of day can make drinkers prefer one taste to another. “I thought he was a gringo loco.” Alcaraz’s contract with Siete Leguas, however, specified that he got a cut of the profits from any brand the distillery produced. So why not hear out the American? Also, it impressed Alcaraz that Crowley was interested in quality, not volume.

The gringo loco would later explain to Alcaraz—in discussions offthe street— that he had distribution connections in California from previous wine and restaurant ventures; that his drinking buddy and business partner, John Paul DeJoria, who’d made a fortune as cofounder of hair-care products company John Paul Mitchell Systems, had friends in Hollywood; and that his vision was to put his tequila in an attractively designed bottle, unique at the time, that conveyed the handcrafted soul of Mexico. He intended to call it Patrón, because one meaning is “godfather.” Alcaraz agreed to talk to the González family and, eventually, Siete Leguas contracted with Crowley. No one ever expected the brand to become the world’s largest producer and exporter of premium tequila.

Alcaraz relayed this story to me on the balcony of the palatial Hacienda Patrón, just outside of Atotonilco. Blue agave fields stretched in every direction beyond the manicured lawns. Below us was a courtyard with tall palms, a granite fountain, and a bronze statue of Alcaraz erected a few years ago at the entrance to the distillery. In one hand he holds an hijuelo, the small offshoot of an existing agave plant from which a new plant grows; in the other, the distinctive Patrón bottle.

Few know who he is, but Alcaraz is a major reason why Patrón is a household name: He came up with the production method, which introduced great complexity and flavor to its unaged tequila and reintroduced the spirit to a generation of drinkers. Without him, it’s unlikely that Bacardi Ltd. would have purchased the 70 percent of Patrón Spirits International AG that it didn’t already own for $5.1 billion in January, a deal that made Alcaraz a rich man— about 3 percent of the sale price, or $150 million, went to the master distiller, according to a lawsuit filed against Patrón by an ex-employee in 2013—and rounds out Bacardi’s premium portfolio, which includes Grey Goose vodka and Dewar’s Scotch.

According to the Distilled Spirits Council, tequila sales have more than quadrupled from 2002 to 2017 in the U.S. alone, with most of the growth in high-end brands. Bacardi is banking that Patrón still has room to grow internationally. The question is whether people around the world will get to know Patrón as the traditional spirit it’s always been or whether expansion plans will turn the tequila into a product beneath Alcaraz’s standards.

Alcaraz was born in 1946 in the swampland south of Guadalajara, Jalisco’s capital. Tamazula de Gordiano, the “lagoon of toads,” is named for the brown cane toads that infested the fields that fed the sugar factories where his father worked as a mechanic. He grew up in his dad’s machine shop, watching factory chemists go to work in their labs wearing clean white coats. “I wanted to be them,” he says.

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