Beer in Mexico
Euromonitor International's Beer in Mexico market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
Buy online to access strategic market analysis and an interactive statistical database of volume and value market sizes including on-trade and off-trade, company and brand shares, distribution and pricing data.
Tables: 66 | Publication date: Mar 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Dark beer; Lager by origin; Lager by price platform; Low/non- alcohol beer; Stout
Executive summary
Speculation is rife in the Mexican beer sector about InBev’s acquisition of Grupo Modelo SA de CV’s business partner, Anheuser-Busch Cos Inc, and how it could affect the sector. This is because Anheuser-Busch Cos Inc owns 50.2% of Grupo Modelo SA de CV. At the same time, Grupo Modelo SA de CV is the exclusive distributor of Anheuser-Busch Cos Inc’s brands, Budweiser and Bud Light. According to company sources, Grupo Modelo SA de CV’s board can decide whether to accept InBev as a new business partner or possibly repurchase its shares from Anheuser-Busch Cos Inc. At this moment, the future of Grupo Modelo SA de CV remains uncertain, but the company’s sales are so strong that this uncertainty is not likely to have a great effect on beer sales in 2008.
Domestic beer manufacturers are investing in further consumer segmentation through the development of non-alcoholic, flavoured lager and light variants. In 2007, Cervecería Cuauhtemoc Moctezuma SA de CV launched the first domestic non-alcoholic beer, Sol Cero, which was popular among consumers who could not drink alcohol due to health or work reasons. Furthermore, law enforcement initiatives – such as the Alcoholimetro, a device to detect the level of alcohol in the blood – sponsor responsible consumption by highlighting the benefits of drinking a beer with no alcohol content. In 2008, Cervecería Cuauhtemoc Moctezuma SA de CV introduced a flavoured variant of its popular lager Sol, Limón y Sal (lime and salt). It resembles the packaged format of popular beer cocktail michelada, a very popular mix of beer, lime and salt. In contrast, Grupo Modelo SA de CV focused on light variants by offering Corona Light and Tropical Light, which are aimed at women.
Total volume growth in 2008 was faster than that seen in 2007. The hot weather prevailing across the country in the spring and summer of 2008 increased the demand for beer.
Accounting for a small 2% share of total beer volume sales, imported premium lager showed impressive volume growth of 12% in 2008. Grupo Modelo SA de CV increased its imported premium lager portfolio by adding brands Carlsberg and TsingTsao to its traditional Budweiser and Bud Lights brands. Store checks indicate that there were more than 50 imported premium brands available through independent distributors. European beer is gaining shelf space in upscale supermarkets and the gourmet sections of department stores El Palacio de Hierro and El Puerto de Liverpool, targeting affluent consumers in the largest urban areas. Sales through internet retailing are also increasing, as players offer and deliver a wide array of domestic and imported brands.
Total unit price increased by 9% in 2008 due to the rising prices of raw materials such as rice, barley and lupules. Moreover, a new tax imposed by the government on inventories (IETU) also affected unit prices. Interestingly, both imported premium lager and domestic economy lager saw the largest price increases at more than 13% in 2008, while low/non-alcohol beer’s unit price dropped by 7% due to the lower price of domestic Sol Cero (Cervecería Cuauhtemoc Moctezuma SA de CV).
Beer producers are definitely passing the increases in production and distribution costs on to the final consumer. Higher taxes on gasoline along with rising global prices of grain and aluminium hit beer producers hard in 2008.
Artisanal domestic premium lager is a niche segment, which is gaining popularity among affluent connoisseurs. Some producers such as Cervecería Minerva and Beer Factory (Grupo Menaba SA de CV) introduced their popular on-trade brands into upscale supermarkets and food/drink/tobacco specialists. Cervecería Minerva sells lager through Wal-Mart de México, while Grupo Menaba SA de CV plans to expand its number of Beer Factory micro-breweries. Normally, artisanal domestic premium lager is exported to the US. For example, artisanal player Cervecería Tijuana sells the largest portion of its beer production in the southwest of the US, mainly in the cities of Los Angeles and San Diego. Other new online beer entrepreneurs, such as www.cervezasgourmet.com, target affluent Mexicans. This seller offers very unique brands. For instance, it sells beer with the funny name of “Chupacabras”, or “bloodsucker”, with an abv of 6% at MX$40.85 for a 355ml glass bottle.
Domestic standard lager accounted for 97% of total beer volume sales in 2008 and is dominated by Grupo Modelo SA de CV and Cervecería Cuauhtemoc Moctezuma SA de CV. These companies offer Mexicans a wide array of lager products, targeting different consumer and geographic segments. Domestic standard lager products are affordable to most consumers and are a source of national pride. Alternatively, imported premium lager reported a stronger presence, mainly in supermarkets/hypermarkets and food/drink/tobacco specialists, in the first half of 2008.
In 2008, 79% of total volume sales took place in off-trade outlets. Retail volume sales of beer are especially important in the north of the country where higher temperatures are observed during the spring and summer. In this region, beer is believed to quench thirst. Small formats are more popular than larger “caguamas”, the common name for 940ml-1.15l packaging. Convenience stores continued to gain share in beer volume sales to the detriment of independent small grocers, otherwise known as “misceláneas” and “abarrotes”. Independent small grocers accounted for 24% of retail volume sales in 2008. Discounters gained sales due to the expansion of this retailing format across the country in 2007 and 2008, and their lower prices compared to standard supermarkets/hypermarkets.
On-trade volume sales accounted for 21% of total beer volume sales in 2008. Mexicans drink beer during week days at lunch or dinner time. Starting on Thursdays nights, it is common for a group of friends to gather in a bar to drink beer first before changing their consumption to spirits like tequila and vodka. The most popular places to drink beer are full-time restaurants, fast food outlets and bars. In 2008, beer cocktails were fashionable. Traditional michelada is a combination of beer, ice, lemon juice and salt, whereas the michelada cubana mixes beer, ice, lemon juice, Maggie (Knorr) sauce, soy sauce, chilli sauce and salt. The consumption of beer is also linked to sports events, especially football. It is common for men to get together in a bar or restaurant where they are served buckets of chilled beer while they watch a game on television.
Alcohol content in beer ranges from 3% abv for an economy lager such as Tropical (Grupo Modelo SA de CV) up to 5% for premium products such as Casta (Cervecería Cuauhtemoc Moctezuma SA de CV). Some imported European beer products have a 7% abv, and some gourmet brands such as Beer Factory can reach up to 9% abv.
Beer is sold in three packaging formats: non-returnable glass bottles, returnable glass bottle and metal cans. According to industry reports, returnable glass bottles are the most popular presentation, accounting for an estimated 50% of total volume sales. A returnable glass bottle can be reused up to 30 times before being recycled. Consumers take empty returnable glass bottles to any grocery retailer selling that brand and exchange them for full bottles by paying only for the liquid.
Production, Imports and Exports
Grupo Modelo SA de CV and Cervecería Cuauhtemoc Moctezuma SA de CV produce enough beer to satisfy local demand and global exports. Grupo Modelo SA de CV owns seven breweries and Cervecería Cuauhtemoc Moctezuma SA de CV owns six. In spite of being competitors, they acknowledge the importance of having quality raw materials available for their beer production, so they work together to secure it. Both companies are fully integrated and manage their own distribution networks and convenience store chains, Extra and Oxxo respectively. Grupo Modelo SA de CV announced the construction of a new production plant in northern Mexico with an annual capacity of 10 million hectolitres; it is expected to be completed in 2010. This new production facility will produce three out of its 12 brands, mainly for export to the US.
Euromonitor International research suggests that approximately 40 small brewers account for 1% of the volume sales in the sector. These breweries hold a regional and artisanal niche, such as Beer Factory (Grupo Menaba SA de CV) now owned by Controladora Comercial Mexicana SAB de CV. Recent launches by Beer Factory include Coronel, Santa Fe and Coyote y Luna Llena sold in 355ml glass bottles for MX$14. Cervecería Baja California offers Sierra Madre Brewing in a 650ml glass bottle for MX$23, while Cervecería Minerva distributes its lager and imported premium European beer to 100 on-trade outlets and a few supermarkets, parapharmacies and convenience stores in the west of Mexico.
Company sources indicate that Grupo Modelo SA de CV and Cervecería Cuauhtemoc Moctezuma SA de CV exported at least 23% of their volume production in 2007. Main export markets include the US and Latin America, but Europe is also becoming an important market. Companies plan to extend their exports into Russia and China in the forecast period.
Grupo Modelo SA de CV is expected to remain the main exporter of beer, with its Corona Extra brand. Starting in 2007, Crown Imports LCC is the exclusive US-based importer of Grupo Modelo SA de CV’s brands. The company also formed a join venture company, Modelo Molson Imports LP, with Molson Coors in January 2008 for the distribution of Grupo Modelo SA de CV’s brands in Canada. Similarly, an exclusivity import agreement was signed with European Carlsberg to import, distribute and sell Grupo Modelo SA de CV’s brands in Switzerland, Malaysia and Singapore in the same year. With the acquisition of Anheuser-Busch Cos Inc by InBev, the future of Grupo Modelo SA de CV brands in China is uncertain, as the former is the exclusive importer and seller of Grupo Modelo SA de CV’s brands in that country.
Heineken NV is the only importer and distributor of the Cervecería Cuauhtemoc Moctezuma SA de CV’s brands in the US through a contract starting on January 2008 and ending in 10 years’ time. Other small breweries such as Cervecería Minerva and Cervecería Tijuana also export premium and artisanal beer to the US.
Domestic lager accounted for 98% of total beer value sales in 2008. Grupo Modelo SA de CV offers standard and economy brands, whereas its competitor Cervecería Cuauhtemoc Moctezuma SA de CV sells premium brands Bohemia and Casta in addition to economy and standard brands. Bohemia is sold at most supermarkets/hypermarkets, convenience stores and a few on-trade outlets. In contrast, Casta is limited to upscale supermarkets and food/drink/tobacco specialists. Imported premium beer has been gaining popularity in Mexico. In 2007, Grupo Modelo SA de CV added Carlsberg and TsingTsao to its imported portfolio, which includes Bud Light and Budweiser, and several new European brands were found in off-trade and on-trade outlets. In May 2008, large grocery retailer Wal-Mart de México held a festival of imported beer at Wal-Mart hypermarkets and Superama supermarkets to encourage sales of premium lager.
The apparent consumption estimated in official statistics is similar to the data published by Euromonitor International since beer is a sector dominated by two large public companies.
Table of contents
ALCOHOLIC DRINKS IN MEXICO : MARKET INSIGHT
EXECUTIVE SUMMARY
Alcoholic drinks growth slows down ahead of troubled economic times
Fashion and trading down shape the market
Companies target young adults
Discounting and in-store promotions boost sales
Conservative growth anticipated in the forecast period
KEY TRENDS AND DEVELOPMENTS
Pessimistic economic outlook hinders the performance of alcoholic drinks
Demographics shape the performance of alcoholic drinks
Traditional Mexican spirits report mixed performance
Specialist Retailers
Summary 1 Leading Specialist Retailers 2008
Acquisition of Anheuser-Busch Cos Inc puts Grupo Modelo SA de CV in a difficult position
Summary 2 Speculated Merger and Acquisition Activity 2007-2008
MARKET BACKGROUND
Legislation
TAXATION AND DUTY LEVIES
Table 1 Taxation and Duty Levies on Alcoholic Drinks 2008
Table 2 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Sectors 2008
Table 3 Selling Margin of a Typical Domestically Produced Beer Brand 2008 – Corona Extra
Table 4 Selling Margin of a Typical Domestically Produced Wine Brand 2008 – XA Domecq
Table 5 Selling Margin of a Typical Imported Wine Brand 2008 – Concha y Toro
Table 6 Selling Margin of a Typical Domestically Produced Spirits Brand 2008 – José Cuervo Tradicional
Table 7 Selling Margin of a Typical Imported Spirits Brand 2008 – Torres
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 8 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 9 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 10 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 11 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 12 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 13 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 14 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 2008
Table 15 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Volume 2008
Table 16 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Value 2008
Table 17 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 18 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 19 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 20 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 21 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 22 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 23 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
DEFINITIONS
Sources
Summary 3 Research Sources
LOCAL COMPANY PROFILES - MEXICO
BACARDI Y CíA SA DE CV - ALCOHOLIC DRINKS - MEXICO
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Bacardi y Cía SA de CV: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 5 Bacardi y Cía SA de CV: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 6 Bacardi y Cía SA de CV: Competitive Position 2007
CASA CUERVO SA DE CV - ALCOHOLIC DRINKS - MEXICO
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Casa Cuervo SA de CV: Key Facts
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 8 Casa Cuervo SA de CV: Competitive Position 2007
CASA PEDRO DOMECQ MEXICO SA DE CV - ALCOHOLIC DRINKS - MEXICO
STRATEGIC DIRECTION
KEY FACTS
Summary 9 Casa Pedro Domecq Mexico SA de CV: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 10 Casa Pedro Domecq Mexico SA de CV: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 11 Casa Pedro Domecq Mexico SA de CV: Competitive Position 2007
CERVECERíA CUAUHTEMOC MOCTEZUMA SA DE CV - ALCOHOLIC DRINKS - MEXICO
STRATEGIC DIRECTION
KEY FACTS
Summary 12 Cervecería Cuauhtemoc Moctezuma SA de CV: Key Facts
Summary 13 Cervecería Cuauhtemoc Moctezuma SA de CV: Operational Indicators 2005-2007
COMPANY BACKGROUND
PRODUCTION
Summary 14 Cervecería Cuauhtemoc Moctezuma SA de CV: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 15 Cervecería Cuauhtemoc Moctezuma SA de CV: Competitive Position 2007
DIAGEO MéXICO SA DE CV - ALCOHOLIC DRINKS - MEXICO
STRATEGIC DIRECTION
KEY FACTS
Summary 16 Diageo México SA de CV: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 17 Diageo México SA de CV: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 18 Diageo México SA de CV: Competitive Position 2007
GRUPO MODELO SA DE CV - ALCOHOLIC DRINKS - MEXICO
STRATEGIC DIRECTION
KEY FACTS
Summary 19 Grupo Modelo SA de CV: Key Facts
Summary 20 Grupo Modelo SA de CV: Operational Indicators 2005-2007
COMPANY BACKGROUND
PRODUCTION
Summary 21 Grupo Modelo SA de CV Production Statistics 2007
COMPETITIVE POSITIONING
Summary 22 Grupo Modelo SA de CV: Competitive Position 2007
BEER IN MEXICO
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager price band methodology
Summary 23 Lager by Price Band 2008
Published data comparisons
SECTOR DATA
Table 24 Sales of Beer by Subsector: Total Volume 2003-2008
Table 25 Sales of Beer by Subsector: Total Value 2003-2008
Table 26 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 27 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 28 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 29 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 30 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 31 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 32 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 33 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 34 Beer Exports by Country of Destination: Total Value 2002-2007
Table 35 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 36 Beer Imports by Country of Origin: Total Value 2002-2007
Table 37 Company Shares of Beer by National Brand Owner 2003-2007
Table 38 Company Shares of Beer by Global Brand Owner 2003-2007
Table 39 Brand Shares of Beer 2004-2007
Table 40 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 41 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 42 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 43 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013