Mexican beer: coronavirus strips Mexico of beer

Because of the health crisis, the authorities have imposed a shutdown on the production plants of the Mexican beer exporters. The measure, which does not affect other similar products, such as tequila, it can be said that the coronavirus has left Mexico without beer.

Due to the health crisis, the government ordered the closure of the production plants of the largest exporter of beer in the world, an industry that generates 650,000 jobs.
Due to the health crisis, the government ordered the closure of the production plants of the largest exporter of beer in the world, an industry that generates 650,000 jobs.

At the end of March, the government established a contingency plan to prevent the spread of the pandemic. The plan urges people to stay home and suspend all activities not considered essential, despite the fact that 42 percent of its 126 million people live in poverty and tens of millions depend on the informal economy.

The decree excluded beer production from essential activities, which surprised and alarmed producers, who saw that no similar measure was taken in other nations. Mexico is the world's leading exporter of beer: last year it sold 40.1 million hectoliters (one hectoliter is equivalent to 100 liters), according to industry estimates. In 2018 it generated revenues of $4.288 billion dollars. Its main markets are the United States, United Kingdom, Australia, Guatemala, and Canada.

The brewery companies complied and stopped production in an industry that generates 55,000 direct jobs and 650,000 indirect jobs, in a long value chain that in addition to producers and plant workers includes barley and hop farmers, distribution, and points of sale. Although the Government has not clarified why such an important industry has not been allowed to reopen, manufacturers are in contact with the authorities to allow them to restart production, claiming that they have all the hygienic and protective measures in place to prevent the spread of covid-19.

While beer is scarce, cigarettes, a wide variety of wines and liquors and soft drinks can be purchased in any Mexican store, despite the fact that 40,000 people die each year from diseases associated with the consumption of sugar-sweetened beverages, according to the National Institute of Public Health (INSP).

In order not to affect barley producers - an essential ingredient of beer - breweries have already bought up autumn-winter production, but that sector has also been in uncertainty, because it depends on manufacturing. In Mexico, 5,000 farming families benefit directly from the purchases made by the brewers.

In Mexico, there are 1.2 million grocery stores, family businesses that are the direct contact with consumers in the neighborhoods, and rural areas. At least five million Mexicans depend on them, according to estimates by the National Alliance of Small Businesses, an umbrella organization of 85,000 such businesses. Many of its members are desperate, because beer sales are the strongest part of their income.

Mexicans prefer light beer over dark beer

Mexicans have increased their taste for light beer over dark, said research firm Kantar Worldpanel consumption sector. And is that about 23.3 percent of Mexican households prefer this variety of barley-based drink, above 22.9 percent of those who like the dark.

The regular or clear is still the favorite for Mexicans and is that four out of 10 households consume it, only 6 percent of consumers buy prepared beverages.

The importance of light products has impacted the entire sector. Constellation Brands, a producer of alcoholic beverage brands, stated that last year Corona Light was the number one imported light beer in the United States and the most developed in the female segment.

"The production and distribution of Constellation Brands brands in the U.S. are 40 percent of Corona Extra, Modelo Especial with 39 percent and Corona Light and Corona Familiar, with 5 percent each, while the rest correspond to the rest of the portfolio," said the company that has the license to sell the brands of Grupo Modelo in the U.S.

According to this organization, this sector is the most important within the agro-industrial activity in Mexico. Its sale abroad represents about 25 percent of the country's agro-industrial exports, with a value of $4,288 billion dollars in 2018.

That same year the Mexican beer industry produced 120 million hectoliters, assuring Mexico as the fourth largest beer producer in the world, a positive variation of 9 percent compared to 2017. Of these, 40 million hectoliters were for export, mainly to the United States, China, United Kingdom, Australia, and Colombia. Exports grew 19 percent compared to 2017. As for the domestic market, last year 67 percent of Mexican households bought beer 10.6 times, with an approximate consumption of 35.6 liters, according to research firm Kantar.

Four percent of trips to a store involves the purchase of beer, but consumers do not usually buy it alone but to accompany it also buy soft drinks, snacks, bottled water, cookies, and milk. The average expenditure was about one thousand 27 pesos a year, or 2.8 percent of what is spent on food, beverages, dairy, home care, and personal.

Data from the consumer consulting firm Euromonitor revealed that Tecate Light is already the second most consumed brand in the country, with a share of 16.8 percent, placing behind Corona Extra, which has 24.1 percent of the market. Meanwhile, Corona Light has a share of 3.2; Modelo light, 0.7, and Pacífico Light, 0.2 percent.