AGUA MAGICA, RAFAEL SHIN: Sipping With Purpose
You might have noticed that most tequila drinkers are making the switch over to mezcal this summer as palettes mature and novelty is celebrated. The US mezcal market is growing and is currently valued at $400 million. However, the high adoption of commercialized mezcal in cocktail drinks has led producers within the industry to cut corners and remove traditions when growing the agave crop. In hopes to preserve Mexican culture, specifically from Oaxaca, Rafael Shin launched Agua Magica, a premium mezcal to sip with intention.
As recent mezcal drinkers, we got the chance to catch up with the founder of Agua Magica, Rafael Shin to chat about his love for Mexico, and boy does he love Oaxaca! Based in New York City, Rafael received his MBA from Wharton and graduated with classmates and friends who ended up launching companies such as Warby Parker, All Birds, and Harry’s. Talk about having some successful friends, eh?
The Childhood
Founder, Rafael Shin surrounded by agave in Oaxaca.
Born in Seoul, Korea, Rafael moved to Mexico City when he was one, and considers himself to be Mexican. At the time, his parents wanted to explore a new country and were doing a master’s in Philosophy and Latin American History in Mexico. Unlike his partners, Rafael ended up choosing banking as a career upon graduation. “I started my career in investment banking, then moved into consulting, and did equity research at Morgan Stanley for 7 years with a focus on consumer goods companies and spirits before quitting and deciding to jump into the unknown with mezcal. That was my aha moment, being able to see the growth of the mezcal spirit category from a financial perspective” says Rafael.
With over 800 mezcal brands in the market, Rafael felt that he had a competitive advantage based on his childhood and research capabilities. “ I have been traveling to Oaxaca for over 32 years and every time I would go I would discover something new. It’s a very magical place. You have more than 90 dialects spoken and one-third of the population speak some sort of language. It is very untouched in many ways. The people have their own traditions, language, and economic system of how things should work. My best friend since the age of 8 also lives in Oaxaca” says Rafael. Fun fact: Rafael tried mezcal for the first time when he was 13. Chin, chin!
“The mission of our company is to redirect the growth of mezcal and preserve the local communities.” - Rafael Shin.
Launched in May 2021, Agua Magica is a premium mezcal brand that wants to educate consumers on the heritage and traditions of mezcal drinking as well as on the people of Oaxaca. Priced at $65 for 750 ml, Agua Magica can be purchased online or found at specific specialty stores alongside restaurants such as Cosme and Atla. Some of their most popular marketing highlights include partnerships with Soho House Miami, LA, and NYC as well as focusing on liquor stores that have partnerships with Drizly. Their social media explores the untouched parts of Oaxaca and immerses users into its culture, making you feel like a local.
It took the team over two years from ideation to launch and most of that time went into developing the brand, packaging, and taste. For those wondering, Mythology is the mastermind agency behind Agua Magica’s look and feel. “We wanted someone who understood the American market as most of the talent we used to develop the brand was from Mexico. We had a Mexican director, Mexican team, and needed someone to help us translate everything to be more digestible in both the US and Mexican market.”
As for product development and taste, it took Rafael over 2 years to also find a producer and conduct market research. “I met between 80 to 90 producers in Oaxaca and tasted 4-5 different expressions per producer. I would bring back bottles from Mexico to NYC for my friends and have bartenders try it to offer feedback.” Rafael was able to raise a little over $3M from friends and family via a concept pitch deck, pre-product to support his dreams.
“People have a perception that mezcal is too smoky, but that is not true.”
“Most of the mezcal in the US is smoky because it was introduced via cocktails and needed a way to differentiate itself from tequila. But, the reality of it is that mezcal is so diverse. There are more than 25 different species of agave you can use from nonsmoky to very smoky. We source our agave from the region of San Juan Del Rio in Oaxaca where the agave grows with a steep inclination that doesn’t let the rain accumulate. We use Espadin agave which takes 7-8 years to grow and Tobala agave which takes 15-16 years to grow. That is why it is hard for us to justify putting our mezcal in a cocktail because of the duration it takes to produce this specific type of agave.”
Rafael wants to be able to recruit new consumers to the mezcal category. The ones who prefer to sip it on the rocks, discuss its history and notes while debating the philosophies of life. And the taste? Well, we were able to try it and define it as a smooth, sweet, not boring, but a well-rounded finish of goodness. Best recommended being drunk straight from the bottle!
What’s Wrong With The Industry?
“How you drink mezcal has a huge impact on the farmers in Oaxaca and how the agave is grown. If you drink it in a cocktail and mix it with other ingredients, a bartender will want the cheapest mezcal in the market. This causes them to go to Oaxaca, shop for the cheapest mezcal which creates a price-war within producers which then causes a cascading effect for producers to cut corners, cheat and not care about preserving traditions. The more we drink mezcal in cocktails, the more commoditized the problem becomes.”
“Conserving the community of Oaxaca and giving back to preserve their culture and language is of the highest importance to me.” Oaxaca produces some of the world’s best agave and it requires a premium price point.
The Advice
For those looking to launch a spirit company, Rafael shares his advice with us.
The gross margin for spirits typically ranges between 40%-70%.
Put a lot of emphasis on research, design, product development, and distribution.
Be humble and understand that you are going to be wrong many times.
Culture is everything! Think about how you want to design your culture from day one.
Always think about how you can add value to other people (investors, producers, customers) especially as it relates to sales.
Best business book to read: Principals by Ray Dalio. It’s more of a mindset for life.
Support the traditions of Oaxaca and sip with intention, speak with confidence. Perfect for gifting, hosting, and seeming chic, Agua Magica can be purchased here.
Photo courtesy of Agua Magica.
Written by Alysha Malik.