Beer and Wine industry, a major Business opportunity in Mexico
- Posted by México
- On Wednesday March 15th, 2017
- 0 Comments
- alcoholic beverage industry in mexico, business opportunities in Mexico, competitive industries in mexico, relocation to Mexico, strong industries in Mexico
The market for beer and wine is unique. To stay on top, legal, regulatory and transactional advice in this market must combine focus and sophistication. In Mexico, this market has been fairly strong for the last 8 years, because of the production capacity and size of the country. Nowadays, the industry has an annual growth rate of 5.1%. In 2013, Mexican revenues reached 67.8 billion USD with a Compound Annual Growth Rate (CAGR) of 5%.
On 2014, an average Mexican person drank 64 liters of beer and wine, and according to Euromonitor International, this rate will continue to grow almost to 70 liters per person on 2019. With almost 120 million inhabitants, Mexico is a valuable market for exporters and should not be ignored.
The global beer and wine industry is anticipated to grow between 2015 and 2021. The consistent sales of all the product segments (spirits, wine, and beer), have led to the expansion of this market over the last years.
During 2015, the Mexican beer and wine industry had a positive performance because of an increasing demand. This is thanks to the growing interest amongst consumers and the developing of new brands and crafted beer with different flavours and consistence.
Lifestyle trends have contributed to the growth of the beer and wine industry. First of all, the young generations are reaching the drinking age of 18; second, women getting full-time jobs besides having an independent lifestyle; and third, there has been an increase in the average income per household.
Globalisation has also driven the consolidation of the beer and wine industry. Producers have focused their efforts on selling their goods to developing countries just like Mexico. This has been done through the merging of companies, such as Anheuser-Busch InBev with Grupo Modelo and Diageo with Casa Cuervo
In recent years, Heineken, Stella Artois and other eastern brands entered the Mexican beer and wine market by partnering with local producers and distributors in order to get into the sector.
The markets for beer, wine and spirits are relatively specialised and most major producers choose only one of those categories to produce. Nevertheless, companies have been trying to diversify their portfolios to cover multiple types of drinks. For example: Diageo, which is the global leader in spirits, also manages a great number of brands.
The growth of the alcohol industry has come thanks to social and commercial strategies such as:
- Encouraging people to drink by engaging new targets
- Turning products into aspirational symbols, as more refined beverages
- Creating social contexts to drink like celebrations, games or events
- Increasing the prices with more expensive and premium drinks
Summarizing, this consolidation has occurred through mergers and acquisition, global expansion and the integration of the beverages production with other elements of the value chain, such as distribution, raw materials, marketing and advertising.
The mexican beer and wine industry is expected to reach 87.1 billion USD CAGR by the end of 2018. Several companies have plans to expand and build new factories in Mexico, reasons why the country is a major strategic gateway for new job and business opportunities in Latin America.