With Cinco de Mayo on the horizon — not quite imminent, yet sure to arrive as the final wisps of green dye filter from the Chicago River — a key ingredient in the Margarita is experiencing the largest price hike in almost a decade.
A staple not only in the world’s most popular cocktail but in classics such as the Daiquiri and Gimlet, fresh limes have soared in cost over the past year, leaving a sour taste for bar owners across the country. And while inflation is impacting every facet of operations right now, in the case of limes, price hikes owe more to unusually poor growing conditions and socio-economic norms in a country torn by organized crime.
Up to 97 percent of the limes sold in the United States are imported from Mexico, the world’s largest producer of the zesty, fragrant citrus fruit. In the last 12 months, prices have almost doubled there, from 27 pesos (roughly $1.30) per kilo in March 2021 to 52 pesos this month, according to government data published on Tuesday.
The surging lime prices stem from a number of factors, most notably unusually cold temperatures in Mexico’s major growing regions, Veracruz, Martinez de la Torre, and Chavarrillo. “When temperatures drop, fruit matures at a slower rate and growers cannot harvest fruit until it reaches a specific size,” explains Matthew Rendine, director of merchandising at the East Coast-based produce distributor Baldor.
Suppliers such as Baldor typically sell limes in 40-pound cases. Prices fluctuate throughout the year, but average around $32 per case, Rendine says. Today, that figure hovers closer to the $100 mark.
Another major growing region in Mexico is Michoacán, which might be familiar because of the prominence of violent organized crime groups known as cartels. Extortion is common in the region and adds to the final cost of limes, says Laura Calderón, a program coordinator at Justice in Mexico, a U.S.-based think tank and research initiative.
While some reports suggest that the current lime prices stem from ongoing conflict between cartels in the region, Calderón says the territory has been disputed for the past 15 years. Once a stronghold for Los Caballeros Templarios (the Knights Templar cartel), the area has more recently been controlled by La Familia Michoacana and the Cártel de Jalisco Nueva Generación.
In 2019, the latter displaced local growers and took over operations for themselves before leaving inexplicably a few months later. The fallout from this could have impacted today’s lime prices more than any current conflict in the region, Calderón says, adding, “It’s a very complicated situation.”
With America’s overwhelming dependence on Mexico for limes, shortages and price hikes are changing the landscape of drinking and dining stateside. “If you’re getting tacos or ceviche, you’ll notice they’re no longer being served with slices of lime, they’re being served with lemon because it’s so much more affordable,” says Maxwell Reis, beverage director of Gracias Madre, a Los Angeles Mexican restaurant with an agave spirits–focused cocktail program.
Reis has seen case prices rise from a typical $38 to $100 this year, causing details that might otherwise seem inconsequential to have a significant impact on bottom lines. For example, Gracias Madre’s menu showcases the Tommy’s Margarita, a preparation that includes a full ounce of fresh lime juice rather than the three-quarter ounce used in the classic recipe. The bar sells over 1,000 Tommy’s Margs on any given day. “I only buy organic limes so it’s been astronomical,” Reis says.
In other parts of the country, some bar owners report that lime prices are inching closer to the cost of base spirits for cocktails. Joaquín Simó, a partner at New York City’s Pouring Ribbons, has paid close to $150 for a case of limes this year. “That Daiquiri costs a lot more,” he says. “All of a sudden your three-quarter ounce of lime juice ends up costing more than your 2 ounces of white rum, which is ludicrous — absolutely insane.”
To offset the rising costs and reduce waste, Gracias Madre upcycles all leftover lime juice at the end of each day into a shelf-stable cordial. This ingredient is then incorporated into other cocktails, including slushies. But at other bars, lime cordial itself presents a unique challenge.
Over a decade ago, Toby Cecchini developed a cordial recipe that mimicked the version used by the 19th century British Navy, allowing him to shake up historically accurate Gimlets. The cocktail has been a mainstay on the menu at the Long Island Bar, which Cecchini co-owns, since he restored and reopened the space in 2013.
A labor-intensive, fairly low-yielding preparation, Cecchini’s lime cordial incorporates fresh lime juice and peels with sugar and ginger. With 1 ounce of the ingredient and an additional three-quarter ounce of fresh lime juice used in his Gimlet spec, Cecchini is considering whether it’s financially viable to keep the drink on the menu. “I can’t charge people $25 for a Gimlet,” he says.
Yet bar owners such as Cecchini are well versed in songs of resilience and the current situation isn’t without precedent. Those who have been in the industry for more than a hot minute will recall the “Great Lime Shortage” of 2014, which stemmed from similar roots and saw prices rise to $130 per case in some markets.
That time around, Cecchini replaced his Gimlet with a drink called the Lemon Quinine Fix. Also made with a proprietary cordial, this preparation instead used lemons (peel and juice) and cinchona bark. “It’s much easier to make lemon cordial because the peels are huge and there’s so much more juice,” he says.
As Cinco de Mayo approaches, respite may — thankfully — be on the horizon. Baldor’s Rendine expects prices to normalize in “three to four weeks,” though this is dependent on improved and sustained weather conditions.
“Mother Nature is the biggest factor in the produce industry,” Rendine says.