just the Facts – The Mexican soft drinks market

Embotelladoras Arca announced yesterday (15 January) that it is to merge with its Mexican rival, Grupo Continental (Contal). The deal will create what it claims is the second largest bottler in Latin America. Here, we take a closer look at the Mexican soft drinks market with the help of Datamonitor’s Soft Drinks in Mexico research report.

• The Mexican soft drinks market grew by 3.7% in 2009 to reach a value of US$15.18bn. By 2014, the market is forecast to have a value of $17.88bn, an increase of 17.8% on 2009. Carbonated soft drinks (CSD) sales proved the most lucrative in 2009, generating total sales of $12bn, equivalent to 79% of the market’s overall value. 
• The Coca-Cola Co is the leading player in the Mexican soft drinks market, generating a 60.9% share of the market’s volume. PepsiCo trails with an 11% share, followed by Dr Pepper Snapple Group with 8.1% of the market.
• The leading players generate most of their sales from the production of concentrates, which are sold to bottling companies. Some of those bottlers are independent, others are owned by large manufacturers described usually as ‘partners’ and ‘customers’.
• Players generally try to distinguish their products from rivals by stressing their health benefits, particularly for juices and functional drinks. While the report notes that it would be difficult for a new entrant to compete with the brand strength and reach of the existing major players, it may be possible to enter the market and achieve small-scale success by highlighting a unique production method or nutritional benefits. 
• Supermarkets and hypermarkets form the main distribution channel in the Mexican soft drinks market, accounting for a 31.6% share of the total market’s volume. On-trade accounts for a further 23.8% of the market, while independent retailers hold a 14.3% share.

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