June Management Briefing - The BRICM Markets – Part VI: Mexico

By Pacifica Goddard | 6 July 2010

Mexico drinks industry grows reputation for exports

According to the US Department of Agriculture (USDA), about 70% of the 2.5bn litres of fruit and vegetable juices sold in Mexico in 2009 were produced domestically. Mexico exported US$266.99m worth of juices in 2009, compared to US$308.23m in 2008 and US$247.29m in 2007, according to the UN Comtrade database. Mexico’s main export market for juice is the US, which absorbed 72% of Mexico’s juice exports in 2009, followed by the Netherlands (9%) and Japan (3.5%).

Grupo Jumex is Mexico’s leading producer of juices and nectars, with a 27% share of the domestic market, according to the USDA. Grupo Jumex began exporting products to the US in 1982 and now also distributes products throughout much of Central and South America and the Caribbean. The company additionally sells products to Japan, Lithuania, China, Togo and Ghana.

Jugos del Valle is the second-largest producer of juices in Mexico, where 80% of the company’s product is sold domestically. In late 2007, the company was acquired in a joint venture by The Coca-Cola Co and another joint venture, Coca-Cola FEMSA (53.7% owned by Femsa, 31.6% by Coca-Cola). Coca-Cola FEMSA is the leader in the carbonated soft drinks (CSDs) market in Mexico, the largest Coca-Cola bottler in Latin America, and the second-largest in the world. It sold 2.4bn unit cases of beverages in 2009 according to company statements (1.96bn in CSDs, 349m in bottled water, and 120.5m in still beverages) about 50% of which was consumed in Mexico, with the rest going to Brazil (17%), Colombia (10%), Venezuela (9%), Argentina (8%) and Central America (6%).

Its Mexican parent, FEMSA (Fomento Economico Mexicano SA), is the second largest producer of beer in Mexico - controlling about 40% of the domestic market - with brands such as Sol, Dos Equis and Tecate. Export sales were 3.57m hectolitres in 2009, valued at MXN4.7bn (US$364m) or 10.2% of FEMSA’s total beer revenues. The US is FEMSA’s most important export market, followed by the UK. In January 2010, Heineken acquired FEMSA, thus expanding the reach of FEMSA’s export opportunities.

Grupo Modelo, the producer of popular beers such as Corona, Negra Modelo and Pacifico, controls roughly 60% of the Mexican beer market and sold 37.3m hectolitres domestically in 2009. Modelo also performed very well in foreign markets, exporting five of its 13 brands to 160 countries, with export volume equalling 29.1% of the total volume and 40.9% of net sales. Corona, Modelo’s top selling beer, is the number one premium imported beer in 47 different countries and the fifth-most sold beer in the world. Grupo Modelo enjoys a 28% share of the beer import market in the US, the company’s top market apart from Mexico.

Spirits produced in Mexico include rum, brandy and the agave spirits Tequila and mezcal. Tequila in particular has gained popularity outside Mexico and is currently exported to 91 countries. According to the Tequila Regulatory Council (CRT), 136.4m litres out of the 249m litres of Tequila produced in 2009 were exported. The US is the most important market by far, importing 108.1m litres, followed by Germany (5.9m), Spain (3.1m) and France (2.3m) in 2009. Apart from the market leader Jose Cuervo (which is Mexican-owned but partnered with Diageo as a global distributor), Mexico’s largest Tequila producers are now owned by multinational US-based companies – for example Herradura (owned by Brown-Forman), and Sauza and El Tesoro (owned by Fortune Brands). Popular liqueur exports from Mexico include the coffee liqueur Kahlúa, a brand currently owned by French company Pernod Ricard.

Juice exports from Mexico, 2009

Top markets, values, and volumes (US$ and kg)

Partner

Trade value (US$)

Net weight (kg)

Trade quantity

World

266,987,410

236,744,955

236,744,955

US

192,751,728

187,148,927

187,148,927

Netherlands

24,476,115

15,169,275

15,169,275

Japan

9,337,614

4,945,789

4,945,789

Venezuela

5,019,168

2,271,559

2,271,559

Spain

3,661,625

2,551,447

2,551,447

Belgium

3,344,699

3,388,947

3,388,947

Germany

2,972,162

2,412,308

2,412,308

Israel

2,915,667

1,654,347

1,654,347

UK

2,482,957

1,159,968

1,159,968

Colombia

2,057,071

1,945,149

1,945,149

Australia

1,920,029

1,012,947

1,012,947

Italy

1,913,307

1,061,305

1,061,305

Guatemala

1,870,986

1,021,780

1,021,780

Latvia

1,285,362

638,451

638,451

Dominican Rep.

1,115,250

1,036,802

1,036,802

Switzerland

1,106,658

561,145

561,145

Costa Rica

1,054,823

931,546

931,546

El Salvador

781,671

812,667

812,667

Poland

705,171

467,568

467,568

Source: United Nations Comtrade Database

Wine exports from Mexico, 2009

Top markets, values, and volumes (US$ and kg)

Partner

Trade value (US$)

Net weight (kg)

Trade quantity

World

3,733,321

2,362,895

2,362,895

US

1,737,655

349,704

349,704

Japan

1,088,353

1,836,414

1,836,414

Areas, nes

460,577

16,667

16,667

France

123,429

32,783

32,783

Belgium

64,900

19,258

19,258

Switzerland

59,712

31,722

31,722

Netherlands

55,850

18,450

18,450

Guatemala

48,257

21,662

21,662

Poland

25,325

9,900

9,900

UK

24,601

9,005

9,005

Costa Rica

23,380

7,335

7,335

Italy

7,286

2,525

2,525

Honduras

6,460

5,100

5,100

Canada

3,607

350

350

Trinidad and Tobago

1,460

960

960

Neth. Antilles

1,050

600

600

China, Hong Kong SAR

873

27

27

Haiti

438

360

360

Spain

100

34

34

Source: United Nations Comtrade Database

Basic Query Results
 
 
Period
Trade Value
NetWeight (kg)
Trade Quantity
2005
$1,507,274,023
1,625,190,722
1,625,190,722
2006
$1,822,742,856
1,923,906,799
1,923,906,799
2007
$1,788,896,517
1,937,443,692
1,937,443,692
2008
$1,790,931,830
2,026,871,669
2,026,871,669
2009
$724,338,435
748,523,674
748,523,674
2005
$1,507,274,023
1,625,190,722
1,625,190,722
2006
$1,822,742,856
1,923,906,799
1,923,906,799
2007
$1,788,896,517
1,937,443,692
1,937,443,692
2008
$1,790,931,830
2,026,871,669
2,026,871,669
2009
$724,338,435
748,523,674
748,523,674
 
 
Copyright © United Nations, 2009
UN Comtrade Database

This is part six of the six-part just-drinks' management briefing for June. For part five, click here.

Sectors: Beer & cider, Emerging markets – BRIC, Soft drinks, Spirits, Water, Wine

Companies: FEMSA, Modelo, Heineken, Coca-Cola Co, Diageo, Brown-Forman, Fortune Brands, Pernod, Ricard

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