Why this is important to Wisconsin businesses: Although two large global companies still dominate the market, artisan and craft beers are booming, and imports have risen 78 percent in the last decade.
Mexico has a strong and long-standing beer brewing tradition. As of the end of 2016, the country is the 11th most populous nation and the 15th largest economy in the world, yet it is the fourth-largest global brewing producer, after China, the U.S. and Brazil. With only two large domestic manufacturers, Mexico overtook Germany in beer production in 2016.
For many decades, the production of beer in Mexico had been dominated by two companies, Grupo Modelo and Cerveceria Cuauhtemoc Moctezuma, founded in the early 20th century and late 19th century respectively. The situation changed in 2010 when Heineken acquired Cerveceria Cuauhtemoc Moctezuma, and changed further in mid-2013, when AB InBev acquired Grupo Modelo for a reported $20.1 billion. These acquisitions opened the Mexican market to dozens of beer brands owned by the large acquiring companies. As of 2016, the country was still divided between these two large companies: AB InBev holds 57.4 percent of total domestic consumption, while Heineken supplies 40.1 percent of domestic consumption, leaving a mere 2.5 percent to small manufacturers—although this percentage has grown with the recent boom of artisanal beer and microbreweries.
This recent consolidation in Mexico is only reflecting a global trend in beer production: As recently as 2004, the 10 largest brewers controlled 51 percent of global beer sales; by 2016, the four largest manufacturers controlled a similar proportion, since continued mergers and acquisitions had further consolidated world beer production.
Beer production in Mexico has been increasing in the past decade, partially due to large investments from acquiring companies, which look to profit from popular brands. Corona Extra, now owned by AB InBev, is one of the top 10 most-consumed beer brands in the world (a notable achievement considering the highly fragmented nature of the market), while the Tecate brand, now owned by Heineken, is one of the fastest-rising beer brands in the U.S.
As previously mentioned, Mexico has developed into one of the top five largest beer producers in the world. According to official sources (INEGI and the Secretary of Economy), production increased by nearly 30 percent in the last decade, reaching 10.5 billion liters annually. Domestic consumption has also increased by about 20 percent since 2007, while exports have risen by 66 percent during the same time period. While imports have also increased by an impressive 78 percent, these still only constitute around one-thirtieth of domestic consumption.
Mexico currently exports to more than 140 countries and territories, while importing beer from 70 nations. As expected, the U.S. is the primary trading partner in these transactions: As of 2016, the U.S. is the destination of 79 percent of Mexico’s beer exports and the source of 96 percent of its beer imports.
The beer industry in Mexico is experiencing the best possible outcome: a boost in production followed by an increase in exports and domestic consumption while imports remain low. Domestic per capita consumption this is estimated at around 62 liters per person per year, positioning the country far from the largest beer consumers in the world (Czech Republic, Austria, Germany or Poland) and even below other Latin American nations such as Brazil and Venezuela, and strongly signaling room for growth in consumption.