Craft Beer Market in Mexico 2015

Craft Beer Market in Mexico
2015
1
National Brewers Association
Craft Beer Market in Mexico
2015
INDEX
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INDEX
EXECUTIVE SUMMARY
RESEARCH METHODOLOGY
COUNTRY OVERVIEW
MEXICAN BEER MARKET
LOCAL CRAFT BEER IN MEXICO
IMPORTED CRAFT BEER IN MEXICO
AWARENESS AND AVAILABILITY OF U.S. BRANDS IN MEXICO
OPPORTUNITIES FOR U.S. CRAFT BREWERIES
REGIONAL PREFERENCES
CONSUMER PROFILE
DISTRIBUTION AND REQUIREMENTS IN MEXICO
COLD CHAIN IN MEXICO
MEXICAN FEDERAL COMPETITION COMMISSIONPRACTICES AND RESOLUTION
- MAIN TRADE ACTIVITIES
- RECOMMENDATIONS
- ANNEX 1: QUESTIONNAIRE FOR INTERVIEWS MEXICO
- ANNEX 2: TRADE CONTACTS MEXICO
- ANNEX 3: PRODUCT AVAILABILITY AND PRICE CHECK MEXICO
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National Brewers Association
Craft Beer Market in Mexico
2015
EXECUTIVE SUMMARY
A market research study was commissioned by the National Brewers Association (BA) to provide information
about Mexican craft beer market and identify main opportunities and challenges for U.S. Craft Brewers interested
in accessing this market. Following are the key points and findings of this research that are explained in detail in
the rest of this document
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Methodology. Imalinx researched consumption and market trends in Mexico and validated key contacts
through formal sources; executed store visits to review product availability; prepared a list of relevant
contacts for the study; conducted 70 interviews throughout the country with importers, restaurant and
bar owners, trade specialists and domestic beer manufacturers to obtain a complete perspective of
current situation and opportunities for U.S. brewers. Results were analyzed and discussed with BA for this
report.
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Mexico’s Country Overview. Mexico is the second largest economy in Latin America with an annual GDP
of 1.3 trillion USD and 3% annual growth expected for 2015. Exchange rate with USD increased from 12.50
MXN/USD to 14.50 MXN/USD in early May 2015, creating pressure on import prices indexed in USD
however there has not been a relevant change in trade in 2015. Mexico’s population of 120 million
inhabitants has 73% of people living in urban areas of more than 100,000 inhabitants. There is high
socioeconomic diversity, where 38% of population of medium to high segments have the education,
discretionary expense and access to electronic media to try new products including craft beer. Main cities
with higher than average GDP per person are Mexico City, Monterrey, Guadalajara and Queretaro, so
sales and marketing efforts must be specific to these segments of the population instead of considering a
massive approach.
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Mexican Beer Market. There is a total of 63 million potential consumers in Mexico. Annual consumption
per person in Mexico is of 62 liters, which is similar to Japan (57 liters) and Spain (66 liters), but lower than
U.S. with 85 liters. There is high preference towards beer as 78% of consumers will prefer it vs. other
alcoholic beverages and beer is the entry beverage of young consumers. Industrialized beer has a
developed distribution network through direct delivery to consumption centers and through convenience
stores and supermarkets such as OXXO with over 40,000 stores. Craft beer complements this market and
holds only 1% of total market share it is growing rapidly in specific segments of population and larger cities
that have discretionary expense and look to try new beer from different origins.
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Craft Beer Industry in Mexico. Industry is driven by domestic brewers that produce around 30,000
hectoliters per year and has a 50% growth rate for the past 10 years. Craft beer production started around
1995 with Cosaco beer with took the U.S. microbrewery model and has been followed by entrepreneurs
in different regions of the country. Mexican brewers have developed Stout, Lager, IPA and other
traditional varieties, but some have developed beer adding chocolate, chili, fruits and many other
ingredients that are part of the local gastronomy and folklore with good results. Craft beer is listed in more
premium restaurants, even having renowned Mexican winemakers entering this industry.
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Imported craft beer is a growing market dominated by European and Asian beer that follows the “Craft
Beer Movement” and has two main characteristics: most importers start small and informal through gray
imports to later formalize operations; and the majority of product is managed without cold change due
to handling complexity and additional cost. Members of Mexican Craft Beer Association (ACERMEX) and
Importers are eager to obtain information about U.S. Industry, quality control management, new varieties
and explore commercial opportunities for U.S. Craft Beer.
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Awareness and Recognition of U.S. Brands. There is limited awareness of the U.S. Craft Beer Industry.
Trade training and electronic communication is highly recommended. Interviewed Importers recognize
popular craft brands, showing interest on representing them in Mexico, but only few have contacts from
the U.S. - Importers and brewers think that having new U.S. brands in Mexico is positive and can
strengthen ¨craft beer movement¨. On the other hand, there is the general opinion that potential
consumers have a perception that U.S. craft beer is similar to industrial beer and they can be better
informed.
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U.S. Product Availability. U.S. craft beer supply in Mexico is irregular and small compared to other
countries, finding around 20 different U.S. labels in different outlets. There are few labels that have
constant and formal distribution in Mexico using large distribution channels such as The Beer Box, owned
by Grupo Modelo. This limited distribution is due to two causes: On the demand side, importers cannot
ensure cold chain; on supply, there is limited interest and follow up from exporters and operations are
not completed. This has made importers to look for alternate channels such as brokers to bring beer into
Mexico without the knowledge or quality control from brewers.
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Consumer Profile. Consumer preferences vary considering age, income, weather and region. It is said that
the Mexican consumer is increasing its purchasing power but that applies to specific sectors in the country.
As mentioned, target markets of medium, medium-high, high-income consumers only represent 25% of
the total population, and they are located in several cities in the country. We were able to map these
preferences by defining three regions in the country (North, center, and south), identified main varieties
consumed per region and define three main types of consumer (Tourist, connoisseur and young
consumer). This will assist BA and its associates to focus efforts when looking for importers or defining
educational or promotional activities.
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Cold Chain in Mexico. Only few local breweries manage cold chain and/ or kegs in regular basis because
they are part of restaurant chains and have they have cold distribution to offset costs. Current market
conditions have beer (craft and industrial) managed at room temperature and only refrigerated to offer
immediate consumption. The Mexican industry assumes that cold chain will not be guaranteed due to
poor infrastructure, cost and handling and low entry volumes that can increase distribution costs up to
25%. However, we have been able to identify at least four importers that are able to ensure cold chain in
the distribution process to Mexico. Current importers consider cold chain as an unnecessary cost that
does not affect beer quality in the short term, so high training on quality control can be provided by U.S.
Brewers Association.
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Non-competitive practices from International brands. Although Mexican competition commission limited
exclusivity contracts with large breweries, it has not been implemented or enacted in trade. On the other
hand, large breweries provide strong financial support, equipment and promotional material to
establishments (food service mainly) through verbal contracts, under the condition of using only their
brands, restricting the entrance of new labels. This would restrict the access to some restaurants and bars
but the craft beer market targets specific consumers, do not commit as strictly to these conditions and is
growing steadily. In fact, the most recognized Chef and Restaurant operator in Monterrey stated that he
has more craft beer than wine listed in his menus and is looking for new options.
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Main Trade Activities. Mexican Brewers’ Association (ACERMEX) coordinates most trade activities. There
are six main events that are focused on domestic craft beer with increasing attendance and participation
from other countries, also each large city is hosting a Beer festival at least once a year. They are combine
product display and sale with seminars for brewers, distributors, importers and media. It is highly
recommended to create an educational program to increase awareness of U.S. industry and create trade
opportunities. Other alternative is to provide closed events for importers, distributors and brewers with
seminars and tastings of U.S. craft beer in Mexico, Monterrey and Guadalajara complemented with a
communication and electronic media program.
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Recommendations. Following are the main recommended actions from this study.
1.
2.
3.
4.
5.
6.
Educational seminar for Mexican importers and brewers and participation in Cerveza Mexico
Training for U.S. craft beer exporters on Mexican market via webinar
Translation of QC BA Guide and distribution to key members in the Mexican industry
Development of “Cerveza Artesanal Norteamericana” (U.S. Craft Beer) marketing strategy.
Social media (Facebook, Twitter, Instagram), Website Spanish.
Ensure intellectual property compliance and recommend breweries to register their brands in Mexico
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RESEARCH METHODOLOGY
Imalinx researched economic information, consumer profiles, consumption and market trends in Mexico from
trade and official statistics and reports; created a questionnaire to guide the research and interviews intended for
key players (Annex 1) and defined a market research list, choosing 10 cities with different consumption patterns
to cover most of Mexican market as follows:
Brewers Association Market Research Mexico Cities List
AVERAGE GDP PER CAPITA MEXICO (TOTAL COUNTRY): 10,300 USD
STATE
CITY
GDP PER
CAPITA
(USD)
D.F.
MEXICO CITY
23,130
Country’s capital and largest city as well as it is the most important most
important political, cultural, educational and financial center. Largest
density of restaurants, bars, importers and breweries.
33,342
Largest city of the northern region of Mexico and third largest
metropolitan area in Mexico. It has a highly industrialized economy,
modern trade and is close from the U.S. It is home of most of craft beer
importers with cold chain capabilities.
14,631
Located in the Western-pacific area of Mexico, is the second largest city in
Mexico. It has a traditional environment that is quickly evolving with
immigration of younger consumers due to renowned universities and
young families due to its good quality of life. Cerveceria Minerva, largest
craft brewery in Mexico is settled here.
NUEVO LEON
GUADALAJARA
MÉRIDA
MONTERREY
JALISCO
YUCATÁN
CANCUN AND
QUINTANA ROO PLAYA DEL
CARMEN
BAJA
CALIFORNIA
SUR
CABO SAN
LUCAS
7,160
DESCRIPTION
One of the main cities in Southeast Mexico. It has a traditional
environment and society but also has immigration of young families,
mostly focused in trade. Consumers seek to pair traditional food with
local brewed beer. Distribution of other craft beers is limited.
20,342
This corridor is the largest tourism destination in Mexico, accounting for
27% of total visitors. 70% of tourists come from U.S and 80% of the hotels
offer an all-inclusive service. Craft beer was only identified in restaurants
outside hotels. There is high opportunity for craft beer due to tourism and
reduced distribution of domestic craft beer.
17,820
West coast resort mainly recipient of U.S. travelers. It is a place for
vacationing, where most visitors stay at all-inclusive resorts. Strong
positioning of local brewers. Similar to Cancun, there is limited offering of
national brands but it offers a distribution challenge as it is located 1,600
miles from the border and freight is expensive and limited.
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BAJA
CALIFORNIA
PUEBLA
QUERÉTARO
MEXICALI
PUEBLA
QUERÉTARO
16,365
Border city located in Northwestern Mexico. Mexicali maintains a highly
educated population with national and international industries investing
in the area. It has a long beer tradition as many of the industrial and craft
beers are well positioned and established in the area.
6,091
Located in East-Central Mexico. The capital city named Puebla is ranked
second in higher education in Mexico with 57 technological colleges and
110 research centers. It ranks fourth in the number of universities and
colleges in the nation. Young consumers can be targeted as they look for
new varieties besides the local produced.
14,940
Querétaro is located in North-Central Mexico, but has the highest growing
rate in the country with several industries establishing in the area and
having the highest immigration rate of the country with 27 new families
establishing in the city every day, creating new consumer base and
required services. It is home for Tempus brewery.
In parallel, we created a contact database including importers, restaurant and bar owners, trade specialists and
domestic beer manufacturers for interview (Annex 2). A total of 70 interviews were conducted to obtain a
complete perspective of current situation and opportunities for U.S. brewers during an eight weeks period.
During the research project, Imalinx was in contact with trade members and attended to three craft beer events
in the country to review and validate information.
COUNTRY OVERVIEW
Mexico has a $1.3 trillion free market economy, oriented towards international trade since the 1990s. It is the
second largest economy in Latin America just behind Brazil and the third in the Continent. Mexico has become the
United States' second-largest export market and third-largest source of imports. In 2013, binational trade reached
nearly $507 billion. Mexico has free trade agreements with over 50 countries.
According to the World Bank, as of 2014, Mexico has 122 million inhabitants with half of them under 25 years,
which combined with the changing and faster lifestyle is modifying consumption patterns closer to those in U.S.
and Europe. Three out of four people (72.3%) live in Mexican cities (CONAPO and SEDESOL, 2012) with over
100,000 inhabitants per city. This is influenced by increases in services, urbanization and economic activity.
However, even with a steady increase of GPD per person in the country (Fig. 1), there is high disparity between
socioeconomic segments of population, with Only 21% of total population corresponding to medium to high
populations representing potential consumers for craft beer (fig 2.)
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Fig 1. GDP per Capita (Source World Bank)
Fig 2. Socioeconomic levels in Mexico (Social Investigations Institute- Mexico)
A/B: Upper Class (6.8% total population) – This is the segment with the highest life standards in the country. The family head is
composed by individuals with Bachelor´s degree or higher. They live in high quality houses or apartments; have access to travel to
U.S. and other countries. Usually the trendsetters, they are well informed and are most likely to try new products to incorporate
them into their regular consumption. They assign a high discretionary expense portion to entertainment, leisure and dining out.
C+: Upper Middle Class (14.2% total population) – This segment include individuals with Bachelor’s degree and some access to U.S.
products. Although they do not travel as often, have access to information and imported products, usually paying a premium to
purchase them in Mexico. Generally, they live in houses or apartments of their own. A more rational consumer that care value of
items and perceive craft beer as a gourmet product that they would like to consume. Luxury items are saved for personal nurturing
and saved for special occasions
C: Middle Class (17% total population) – This segment contains individuals working for companies or with small businesses. Their
homes are houses or apartments that can be owned or rented with some amenities. In addition to this category, young consumers
are also included due to their income level. They all tend to buy craft beer to be socially accepted
Exchange rate increased from 12.50 MXN/USD to 15.50 MXN/USD (fig. 3) in early May 2105, creating pressure on
import prices indexed in USD however there has not been a relevant change in international trade in 2015,
however it is expected a trade-down or substitution effect in some non-essential items including beer. According
to analysts, exchange rate will reach and surpass 15 MXN/USD on regular basis during the year.
Fig 3. Exchange rate trend MXN/USD March through May 2015 (OANDA)
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MEXICAN BEER MARKET
According to FEMSA, Mexico
represents a 63 million consumers
market with one million beer
younger consumers joining each
year. Annual consumption per
person in Mexico is of 62 liters,
which is similar to Japan (57 liters)
and Spain (66 liters), but lower than
U.S. with 85 liters. (Fig 4).
Fig 4. Beer World Consumption per Capita
There is high preference towards
beer as 78% of consumers will
prefer beer it vs. other alcoholic
beverages and it is the entry
beverage of young consumers due
to its low alcoholic content and
high distribution in Mexico. This
provides Mexico with the highest
preference rate for beer in the
American continent, with a rate
even higher than the U.S.
Fig 5. Beverages Preference in American
Continent
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Industrialized beer has a developed distribution network through direct delivery to consumption centers and
through mom and pop stores and convenience stores such as OXXO owned by FEMSA with over 40,000 selling
points. Craft beer complements this market and holds only 1% of total market share it is growing rapidly in specific
segments of population and larger cities that have discretionary expense and look to try new beer from different
origins.
Official Mexican data show that U.S. is the largest exporter of beer into Mexico but it is mainly through large
brands. Belgium, Germany, Guatemala and Netherlands follow in total exports. According to information obtained
from interviews and trade visits, a large percentage come from craft beer.
LOCAL CRAFT BEER IN MEXICO
According to Mexican master brewers interviewed, Gustavo González owner and creator of Cosaco Microbrewery
is the pioneer of craft beer in Mexico. He was inspired by U.S. brewers and started in 1995, taking him 5 years to
master the art of craft beer production. In 2000, he created a malty, creamy and pure beer that could fulfill a gap
in the market that big companies were not reaching in regards to quality and taste. Many entrepreneurs followed
into his footsteps and started the creation of new and complexes varieties of beer to respond to the Mexican
consumers’ demand. In 2011 domestic production went from 22,000 to 30,000 hectoliters with a 36% growth rate
as a result of increasing demand influenced by increasing offering and an international trend mainly influenced by
the U.S.
Many of the Mexican craft brewers are well positioned among their consumers and in their respective regions,
having a large consumer base close to their origin but slowly expanding to largest cities in Mexico. Cervecería
Minerva leads the market with estimated sales of 1.5 million liters in 2013, followed by Andreu Primus with
estimated sales of 0.68 million liters that 2013. ACERMEX (Mexican Association of Beer) has 153 listed brands of
artisanal beers in Mexico being the states of Baja California Norte and Baja California Sur in the North of Mexico
as well as Mexico City and Estado de México the cities where most of them are based. A diagram of representative
brands is shown below (Fig 6)
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Fig 6. Domestic Craft Beer in Mexico
According to Mexican Brewers Association, craft beer market has expanded at a 50% annual growth rate in the
last 10 years. Mexican brewers create traditional varieties such as Porter, Stout, Lagers, IPA, among others as their
base portfolio to include traditional consumers are more conservative when trying craft beer for the first time.
However, they also innovate by creating craft beer that preserve the old and traditional European techniques
incorporating a Mexican twist by adding chocolate, chili, fruits and other ingredients that are part of the Mexican
gastronomy and folklore. These new ingredients have been accepted by the Mexican consumer and every year
new varieties are created in order to surprise its taste preferences.
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Mexican brewers consistently import malt, hop and yeast from U.S., U.K., and Germany; while bottles, caps and
other packaging materials are purchased with local suppliers. There is a general concern about hop supply for the
industry and they consistently requested supplier contacts. This represents an opportunity to develop closer
relationship between BA and local brewers.
Mexican brewers openly welcomed the idea of contributing to this market assessment and do not perceive foreign
brands as a competition. In turn, they believe that if the Mexican market grows in terms of brands and labels they
will be benefited in the short term by increasing craft beer consumption reinforcing the market. They are
interested in obtaining training and exchange ideas to increase craft beer consumption in Mexico, consider
distribution through of U.S. craft beer through Mexican breweries, evaluate collaborative craft beer projects
between Mexico and the U.S., also increasing awareness and word of mouth of U.S. industry in Mexico.
IMPORTED CRAFT BEER IN MEXICO
Importing beer into Mexico is a business that has worked well for Mexican entrepreneurs. Most importers started
importing small quantities beer from different origins to experiment, formalizing their business only after years of
success. Most of them have been over ten years in business and are mainly located in Mexico City and Monterrey
(Full list in Annex 2). There is a higher offering of origins different from U.S. mainly due to lower quality controls
and the lack of cold chain, resulting in competitive prices and increasing distribution.
AWARENESS AND AVAILABILITY OF U.S. BRANDS
This research study identified around 50 U.S. craft beers in the country that are listed in Annex 3 of this document.
Unfortunately, it is assumed that most are imported informally and without the knowledge of the brewery, with
few exceptions. Interviewed importers showed interest on having U.S. craft beer in their portfolio, since it is
considered as a high-quality and sophisticated product that has good response in the market. Most of them have
imported or distributed U.S. craft beer at some point because the market demands it but efforts have not been
structured or consistent through time. There is potential to train them to understand the benefits of cold chain
and explore trade alternatives with U.S. craft brewers that can be benefited from their knowledge, contacts and
distribution.
Most of U.S. craft beer exports to Mexico have been through gray imports that have been coincidentally caused
by three main reasons:
1. Informal Test Market in Mexico, No Interest of U.S. Craft Brewery
The first contact that U.S. craft beer establishes with the Mexican consumer is through people residing in border
cities who illegally bring the product into the country in trunk of their car in different occasions. This way the
consumer tries the beer for the first time and starts looking for points of sale in which he can finds it. Main entry
points are Tijuana, Monterrey, Mexicali and Mexico City. After this first contact occurs, the “illegal importer” looks
for the way to bring it into the country through formal procedure and in larger volumes. They first attempt to
contact the brewery in U.S. and from the information gathered, the breweries do not show interest in having a
Mexican importer as a client and rather supply their local demand or expand within the U.S. before exporting their
product to another country and Mexico is usually not the first option.
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2. Interest of U.S. Craft Brewery, No Compliance of Cold Chain into Mexico
If a U.S. brewer decides to sell craft beer to a Mexican importer, they set requirements to the importers to execute
the first operation. As negotiations advance, the parties review in detail the requirements set to keep the quality,
image, values and reputation of the brewery. Until this point, they realize that the biggest constraint that the
importer will face is the inability to manage cold chain due to the lack of infrastructure in Mexico and the high
costs related to this requirement. Once the importer research all the associated costs and realizes that the final
price is above the average of an imported beer, they will drop negotiations, usually without notifying the other
party. Then, importer will look for a similar craft beer from other origin (mainly Europe) with lower quality and
price that will not set requirements and that can be transported without the use of cold containers.
3. Indirect Sales through Brokers in the U.S.
Another way to legally import beer into Mexico is by not having direct contact with the U.S. brewery directly and
import using a U.S. distributor or broker that will be more permissive on quality, temperature control and
expiration dates. According to interviews, this is the most common practice for bringing U.S. craft beer due to
demand of specific labels by Mexican clients. Importers will get a quotation from broker, no matter how this
affects the final price having average U.S. craft beer at excessive prices (up to 15 USD per bottle). There are several
labels in the Mexican market that were found during this research that may be imported without the knowledge
of its manufacturer. Details in Annex 3 of this document.
OPPORTUNITIES FOR U.S. CRAFT BREWERIES
We identified at least four importers mostly in Monterrey that able to follow a cold chain and willing to have the
representation of U.S. breweries in Mexico (Found in Annex 3). These importers have a good understanding of the
market, know all the imports procedures and have a strong feel of sensitiveness to read consumers’ needs and
meet them. One of them established the largest Craft Beer store in the country with almost 2,700 Square feet
called Beer4us.
We also identified other importers open to having U.S. craft beers in their portfolio, but will not provide cold chain
because they find it expensive and an unnecessary added cost in a price sensitive market. Although they are also
candidates for training, they will be longer-term prospects if cold chain is a requirement but are able to manage
room temperature product.
One key finding during this research relates to credit to Mexican importers. These importers are aware that U.S.
breweries will not offer credit because it takes time to build a long-term relationship where trust is the main player
and then credit can be granted and is a common practice to pay up front.
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REGIONAL REFERENCES
Mexican market consume craft beer from five main origins: Mexico, Belgium, Germany, Guatemala and
Netherlands. Mexico is welcoming intense and deep flavors, with increasing demand for IPAs; women prefer
sweet flavors such as Lambic styled.
Fig 7. Regional Beer Preferences in Mexico
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CONSUMER PROFILE
It is said that the Mexican consumer is increasing its purchasing power but that applies to specific sectors in the
country. Consumer preferences vary considering age, income, weather and region. As mentioned, target markets
of medium, medium-high and high-income consumers only represent 38% of the total population, and they are
located in several cities in the country.
During research in Mexico, while visiting Mexican cities we identified three main types of consumers, which are
below described.
Fig 8: Craft Beer Consumers
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A. Young consumers
Between 22-35 years old, independent, from medium to high social economic status and is able to afford a beer
that costs the equivalent to a six-pack beer in addition to the latter. They willing to pay a beer of $30 to $100 MXN
($2-$6 USD) in addition to their regular industrial brand. They look for this product at a venue that gathers people
form his same age and prefers to try an exotic flavor than a regular one; some types of beer that he looks for is a
Lambic, IPA, Stout, Porter and beers which bottle calls his attention because its innovative or jazzy look. Gender
is equally distributed between men and women. This consumer can be found in cities such as Mexico City,
Monterrey, Guadalajara, and Puebla.
Fig 9. Popular beers for young consumers
Left: (Lucky Buddha, China)
Right: (Hipster Joe, Mexico)
B. Connoisseur
From 30-50 years old and belongs to a medium high to high social economic status, does not care about the beer’s
price but its quality. This type of consumer travels, have tried craft beer abroad and have basic knowledge of
varieties. They look for a better version of its favorite variety instead of trying new ones, some of the popular
styles are Lagers, Stout, IPA (British style), and Wheat. They are not trying a risky new flavor but a deep traditional
style flavored beer. These consumers usually attend specialized stores and craft-beer only venues in Monterrey,
Mexico City, Playa del Carmen, Guadalajara and Mérida. There is a strong movement around beer in Mexico held
by women; this niche of market is increasing every year. Observation and comments expressed by beer
distributors led us to an estimated 35% of female consumers. A National Female Beer Sommelier Association was
created grouping women for guided tours, tastings and conferences that could be a good target for training
seminars provided by Brewers Association.
Fig 10. Popular styles consumed by connoisseurs
(Sierra Nevada)
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C. Beer Tourist
This type of consumer is a national or foreign traveler that will ask for local craft to pair with food at a restaurant.
The age rank starts at 30 years old belonging to medium-high to high social economic status, visiting high-end
restaurants and local pubs or breweries seeking a local brewed beer or craft beer they have already tried either
national or imported. They behave differently than other two type of consumers as they modify their consumption
patterns in a different location than home. In touristic destinations such as Mérida, Los Cabos, Cancún, Playa del
Carmen, and Puebla in which local gastronomy plays an important role that can be considered for pairing and
variety definition.
Fig 11, popular beer among tourists
Left :( Ceiba, Mexico)
Right: (Pedernales, U.S.A.)
DISTRIBUTION AND REQUIREMENTS IN MEXICO
FREIGHT AND IMPORTS COSTS
Focusing on beer coming from U.S. into Mexico, the most common method is ground freight based on EXW
Incoterm. Below you can find reference cost analysis for one full container of beer. Please note that these are
reference costs and any evaluation must be consulted with a customs agent appointed by Mexican importer:
-
Inland freight origin to border Mexico (San Diego, CA to Laredo, TX)
Inland freight border Mexico to Monterrey
Added Value Tax
Special Tax Products and Services (IEPS)
-
Imports tax
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2,500 USD
1,500 USD
16% total product cost and freight U.S.
a) 25% total product cost and freight U.S.
If alcohol content below 14% GL
B) 30% total product cost and freight U.S.
If alcohol content below 14% GL
Exempt with U.S. Certificate of Origin
LABEL REQUIREMENTS
All foreign products coming into Mexico need to comply with the Official Mexican Standards (NOM) which are
regulated by the General Health Law (Ley General de Salud) In the case of beer, the sanitary control of all alcoholic
beverages ARE under the NOM-142-SSA1-1995 technical regulation (published in the Official Gazette of Mexico
on July 9, 1997).
Label compliance IS RESPONSIBILITY OF IMPORTER. Alcoholic beverages
between 2% and 55% GL must include the following information in Spanish:








Name/brand name of the product
Type of product (e.g. wine, malt beverage, etc.)
Net content (in metric units)
Country of origin
Name/company name and address of the importer
Alcohol content (followed by “% alc. vol.”)
Lot number (identification number)
Warnings (Abuse of this product is hazardous to your health / “El
abuso en el consumo de este producto es nocivo para la salud”), as
per Article 218 of the General Health Law.
Fig 12. Compliant label in Spanish
DISTRIBUTION CHANNELS
As mentioned, craft beer is imported by smaller or regional importers that have an established clients´ base that
include different distribution channels:
-
-
Foodservice. A clear recovery of tourism and restaurant industries is triggering demand of gourmet, craft
and foreign ingredients and products. Restaurants, hotels and distributors have modernized and are
looking for products that can ensure consistency, reduce preparation times and increase margin while
providing the best experience for a more demanding tourist or client. Renowned chefs and opinion leaders
have increased their craft beer listings and paired with menus, creating an opportunity for U.S. craft beer.
Specialized Bars and Pubs. They specialize in craft beer, usually offering local or regional beer but also
complementing from popular brands from around the globe. They bring U.S. beer irregularly and there is
not consistent supply compared to other origins. This can be a consequence of lack of cold chain
mentioned before in this document.
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Specialized Stores and Retail. Specialized and known outlets such as The Beer Box are common and
increasing in Mexico. They are independently managed and do not offer consistent distribution. On the
other hand, high-end retailers such as City Market focused in gourmet and high-end products are
increasing offering of craft beer from many origins different that U.S. and it is attributed to lack of cold
chain and availability of cheaper brands. An emerging sector of specialized high-end beer stores has
started in Monterrey and it is expected to increase coverage if successful. One issue to consider when
selling direct to retailers are trade terms that can extend payment up to 60 days form delivery
High-End Supermarket
Hypermarket /Megamarket
Specialized Stores
Independent Restaurants/Pubs
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COLD CHAIN IN MEXICO
All formal sources, studies and interviews indicate that Mexico does not have a developed cold chain
infrastructure and this issue is not exclusive to craft brewery industry. According to International Association of
Refrigerated Warehouses, U.S. counts with 2.5 billion cubic meters of refrigerated warehousing while Mexico has
only 47 million. There is a fragmented market and independent contractors own 63% of all refrigerated fleet and
only 37% is owned by companies or vertically integrated organizations. According to Mexican Transportation
Institute 78% of total refrigerated transportation is concentrated in Mexico City, Monterrey, Guadalajara, Tijuana,
Toluca and Tijuana. Transportation companies establish regional routes that are profitable, usually ignoring lesser
routes that increase cost dramatically due to inability to use transportation on the way back.
Craft beer in general is only found cold in points of sale to fulfil consumer’s preferences and to facilitate immediate
consumption but quality is not associated with this practice. Importers mentioned that only U.S. suppliers have
this requirement and there is a wide number of brands and labels from many origins, such as U.K., Germany,
Belgium, Estonia, China etc. that offer high-quality craft beer without a refrigerated transportation condition.
Importers relate cold chain to quality but would not commit because the cost increases by 25%, resulting in
reduction of margin and product rotation. On the other hand, as mentioned before, there are few importers that
understand the quality factor in craft beer and there are respectable cold chain suppliers in Mexico such as Frialsa
and Frigologics. It is important to provide education to importers that are considering cold chain so they can
evaluate options to import U.S. craft beer.
MEXICAN FEDERAL COMPETITION COMMISSIONPRACTICES AND RESOLUTION
The two main complaints that Mexican Federal Competition Commission has dealt with, concerning the leading
beer companies are the following:
a) Namely, Grupo Modelo and Heineken México bought all the barley that the Economy Secretary allowed
with tax exemption due to quotas, leaving the levied barley to the artisanal smaller breweries, increasing
cost and reducing operational margins after paying taxes. Finally, this complaint resulted in the Economy
Secretary increasing the quota of unlevied barley three times larger to help artisanal brewers.
b)
The second one relates to a U.S. brewer that complained the monopolistic practices and exclusivity
contracts that InBev and Heineken where signing with distributors in which they offered a large list of
benefits through incentive programs under the condition of only handling their labels. The Mexican
Federal Competition Commission ordered a reduction in their number of contracts signed, but this has
not been resolved, they reduced the number of contracts extended and they delivered a letter in which
they stated that distributors where now free to handle any beer brand. However, after this resolution
came out they continued offering incentive programs through verbal contracts managed by sales teams,
committing people to continue selling only their brands implying that incentives and promotional material
would be no longer offered if they receive support from other brewers.
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This is a constant conflict between the two largest breweries in the country that interferes by blocking distribution
channels for small breweries and this barrier is usually faced by local craft beer importers that intend to sell
product in high volume outlets. Mexican brewers state that they do not feel threatened by the big companies,
they are aware that even though they manufacture the same product , but craft beer belongs to another category
that targets a different niche of the market and a comparison between their product and a commercial beer is like
comparing “fast food to gourmet food”. It is food, but is made out of different ingredients and under other
processes that ends up on a high quality and unique product that sells to a certain number of consumers which is
lower than the whole market size.
MAIN TRADE ACTIVITIES
The Mexican Brewers’ Association (ACERMEX) coordinates most trade activities. There are six main events that
are focused on domestic craft beer with increasing attendance and participation from other countries, also each
large city is hosting a Beer festival at least once a year. They are combine product display and sale with seminars
for brewers, distributors, importers and media. It is highly recommended to create an educational program to
increase awareness of U.S. industry and create trade opportunities. Other alternative is to provide closed events
for importers, distributors and brewers with seminars and tastings of U.S. craft beer in Mexico, Monterrey and
Guadalajara complemented with a communication and electronic media program.
Name
Ensenada Beer Fest
Cervefest
Copa Cerveza
Cerveza Mexico
Oktoberfest
Soy Cerveza
Date
March, 2016
March, 2016
April, 2016
September, 2015
September, 2015
April, 2016
Place
Ensenada, Baja California
Mexico D.F. (Xochimilco)
Mexico D.F.
Mexico D.F. (WTC)
Quintana Roo (Playa del Carmen)
Quintana Roo (Playa del Carmen)
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Website
http://www.ensenadabeerfest.com/
http://www.cervefest.com.mx/
http://www.copacerveza.mx/
http://tradex.mx/cerveza/
http://clubdelacerveza.mx/
http://soycerveza.com/evento/
RECOMMENDATIONS
1. Training Seminars to Mexican Industry. To increase awareness of U.S. craft beer it is recommended to
participate as exhibitor in Cerveza Mexico Trade Show from September 4th to 6th, 2015 from 12 p.m. to
10 p.m. at Pepsi Center, WTC Mexico City. The event gathers Mexican craft beer industry for three days,
where microbrewers and importers display more than 150 beers of different flavor, style and texture to
encourage the consumption of craft beer in Mexico. The show expects 140 exhibitors in a trade show of
50,000 sq. ft., expecting over 20,000 attendees increasing five times the attendance in five years
2. Webinar for U.S. Craft Brewers on Mexican Market. Based on the results of this research study, it is
recommended to provide a 45-minute webinar to U.S. craft brewers to educate them in exporting to
Mexico and market information that may increase their opportunity to access this market successfully.
The seminar can be executed using Brewers Association systems or through Imalinx provider.
3. Translation and Distribution of BA QC Guide. In order to provide training and technical information about
beer quality we propose the translation of QC guide, editorial design and production of 100 booklets for
importers and key members of trade; and one-page informational sheets for distribution among beer
professionals. We also recommend the implementation of a BA website in Mexico to download electronic
guide. Translation, materials design, printing and website can be finished in six weeks after authorization.
4. Communications and Electronic Media Strategy. It is recommended to establish a website and create a
social media campaign to provide comprehensive information and news about U.S. Craft Beer industry,
provide access to translated BA QC guide and provide contact to importers, media and public.
5. Membership to Mexican Brewers Association and Information Exchange Program. As mentioned, local
brewers welcome U.S. craft industry and can influence a better acceptance of U.S. craft beer in the market.
We recommend obtaining membership to the association; develop an information exchange program
about brewing efficiency and techniques; and contact for hop and other ingredients suppliers from the
U.S.
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ANNEX 1: QUESTIONNAIRE FOR INTERVIEWS MEXICO
Name:
Position:
Contact:
1.-Company’s Profile
a) Brewery’s name:
b) Craft producer:
c) Time operating:
d) Breadth:
2.-Production
a) Year production in liters/hectoliters:
b) Bottles produced:
c) Styles produced:
d) Why did your Company decide to produce these styles?
e) Seasonal production?
f) How does the Mexican consumer has responded to seasonal products?
g) Distribution channel. Why?
h) Where do your inputs come from? Have you presented shortage that affects your production?
3.-Consumer
a) ¿Which promotional activities can help to encourage craft beer consumption in Mexico?
b) ¿How does promotional/incentive programs held by the two largest industrial breweries affect craft beer
consumption in Mexico?
c) At the POS how does the consumer find the product, cold or at room temperature?
d) Did you create your beer in order to be paired with a special kind of food or to be consumed only as a
beverage?
4.-Logistics
a) Are you currently exporting your product?
b) Does your Company has any interest in importing beer from other countries
c) Which kind of training does your Company could need?
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ANNEX 2: TRADE CONTACTS MEXICO
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ANNEX 3: PRODUCT AVAILABILITY AND PRICE CHECK MEXICO
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