The beer industry in Mexico isn’t quite a duopoly, but it’s darn close. Ninety-eight percent of the market is controlled by just two main powers, Grupo Modelo and FEMSA (now owned by Heineken). Grupo Modelo, who is owned by Ambev, has 57% market share and is best known for their global successes Corona and Modelo. GM also owns other successful lines such as Pacífico and Victoria. FEMSA, or “Heineken México”, controls 41% of the market with beers such as Dos Equis, Indio, Tecate, and Sol.
Mexico has historically consumed almost exclusively Pilsner beers, with the exception of a few dark brews here and there. Corona is the best-selling Mexican beer domestically, as well as being the best-selling non-domestic beer in both the United States and United Kingdom. While it is no threat to Corona’s throne, Craft Beer in Mexico has rapidly gained popularity in the past 10 years. Recently, it has maintained a growth rate between 50 and 60%, and is expected to reach 1% market share by 2016.
The main problem was that the corporate giants could offer restaurants and bars what small micro-breweries could not: lucrative exclusivity contracts. Up until 2013, when the FCC issued a ruling to limit the power of these contracts, GM and FEMSA often paid establishments to sell only their beer. Without any means of distribution, craft breweries struggled. As a result, many of Mexico’s craft beers were exported to the US where they were better able to compete. Mexicans looking to expand their palates have fondly welcomed the change, as evidenced by the massive gain in popularity.
5 Comments
So the two combined have 98% of the market?
Between the two conglomerates, Grupo Modelo and FEMSA, yes. That is 98% of the domestic [Mexican] market, not globally (obviously).
I found an interesting article focusing on the recent boom of microbreweries in the Mexico, specifically in the Baja Peninsula. It briefly hits on the impact of the 2013 legislation that was passed, which “allowed Mexican bars to sell craft beer even if they’d signed an exclusivity contract” with one of the major companies that Brennan talked about. The other thing that this article discusses is the fact that the brewing business in the Baja region has exploded in the last five years and now is host to roughly 40 different breweries. This has allowed for an increase in exports up into California that are proving to be viable competition for domestic craft brews. This led me to think of some questions. Given what this article has described, could this just be a local trend where Mexican entrepreneurs are taking advantage of a growing craft beer market in the US and southern California or is it a more country wide theme? The other thought was whether the main goal for these breweries would be to sell in country where the laws are now in their favor or to focus on exporting where markets might be growing faster?
http://www.outsideonline.com/1972946/viva-la-revolucion
What does the craft beer market in Mexico look like? While these beers cannot gain the exclusive contracts that the large-scale brewers obtain, is there much of a presence in the country? Do mexican beer drinkers share similar sentiments to the US and are looking for more speciality, craft-brewed beers?
Since neither will leave the one or two spot in the Mexican beer market anytime soon, why not try to steal some more territory outside beer? The tequila market is in trouble; slow-growing agave plants aren’t as profitable as corn right now. Farms are converting to corn – it has higher margins – so small, local tequila-makers are losing profit. Modelo and FEMSA have the capital to incentivize farmers to grow agaves. Maybe they can sell the tequila equivalent to Bud or Miller.
Comments are closed.