Agave wine has long been popular in Mexico, and is growing in popularity in the States. It is made from the same plant as tequila, and therefore has a similar flavor. Agave wine is much lower in alcohol content, however. This is actually its main attraction in the U.S., where it can be sold by vendors that don't have a liquor license.
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Agave wine is an alcoholic beverage produced from the fermentation of agave sap. Tequila is the distillation of the same material. Because it is produced by fermentation, agave wine contains much less alcohol than tequila.
Real tequila is only produced from blue agave, the common name of Agave tequilana. The plant is a succulent, but is not a cactus. Similar to enforcement of wine appellations, only blue agave produced in Jalisco, Mexico or certain parts of Nayarit, Michoacan, Guanajuato and Tamaulipas can be officially named tequila.
Since agave wine is not tequila, it does not have the same strict requirements. It can therefore be produced much less expensively. Though some agave wine is artificially colored blue to conjure images of blue agave, agave wine is not naturally blue in color.
Like port wine, agave wine can be a fortified alcoholic beverage. This means distilled spirits are added to the fermented product to increase its alcohol content from its initial 7.5 percent. Fortified agave wine is 20 to 24 percent alcohol by weight.
Establishments that do not have a liquor license are able to sell cocktails with agave wine, primarily faux margaritas. Agave wine is also sold in individual serving-size, pre-mixed margaritas.