Seagram’s involvement in the tequila industry and indeed the Olmeca brand dates back to the 1967 when it purchased a distillery in the town of Tequila for its production. However, the conglomerates interests in the category changed dramatically in 1992-93 when Seagram began distributing Patrón in Carson City. At the time Patrón’s owner, St Martin’s Spirits was a small company and Seagram’s large sales force and marketing machine replaced the efforts of a handful of people. The result was dramatic with sales of 5,000 cases jumping to 45,000 cases in just six months and even this was limited by supply. At the time the Siete Leguas distillery was producing Patrón for St Martin’s Spirits and they simply could not keep up with increased demand. As a result, Seagram’s started to build a distillery close to the town of Arandas in Los Altos, Jalisco. At 2100 metres above sea level, Los Altos is a high-altitude region, known for its mineral-rich volcanic red soil and changeable climate, a combination many consider make it the best agave region in Jalisco. As well as its proximity to this region, the 56 hectare site for the new distillery was chosen due to an adjacent 211 metre deep artesian well with a low pH and good mineral content making it ideal for fermentation. (Dilution to bottling strength is by demineralised water.)
In November 1994 Jesús Hernandez travelled back to his native Mexico with a team of Seagram’s engineers from Kentucky to apply his architectural schooling and practical knowledge of bottling and production logistics on the new Patrón distillery project. The distillery, named ‘Destilería Colonial de Jalisco’ was designed to mimic the production processes at Siete Leguas but also to maximise efficiencies resulting from good design and modern machinery. When the site was finished in October 1997 Jesús stayed on to help with the start of production. Just four months after the distillery was commissioned, St Martin’s spirits withdraw from the distribution agreement with Seagram’s despite months worth of production destined to become Patrón already having been produced. While the two company’s lawyers argued the distillery turned its attention to the production of Seagram’s remaining Tequila brands, Olmeca and Mariachi.
Meanwhile, Seagram’s was diversifying into the entertainment industry. Already the owner of
Universal, in the late 1990s, Seagram’s acquired Polygram Records making its spirits industry interests a minority part of its business. In 2001 after Seagram merged with the French entertainment group Vivendi, Seagram’s wine and spirit brands and distilleries were sold to Pernod Ricard and Diageo with its Tequilas going to Pernod Ricard.
The change in ownership proved very beneficial for Olmeca as under Seagram’s it had not been a priority brand so received little focus or marketing support. Pernod Ricard recognised the brand’s potential and appointed Mexican based brand managers to coordinate global promotions and marketing resulting in 20-30% annual increase in sales ever since. Olmeca is now ranked as the No. 1 Tequila in EMEA (Europe/Middle East/Africa), the No. 2 Tequila outside of North America and the No. 4 Tequila in the world overall, in terms of value.