Anheuser-Busch not to miss out on Mexican beer bonanza
Corona, Modelo, Tecate, Dos Equis …: nearly 55 percent of all imported lagers in the U.S. are from Mexico. Not wanting to let this opportunity pass, AB-InBev’s U.S. unit Anheuser-Busch (A-B) will import its Mexican brand Montejo to Southwestern U.S. as of September this year, media reported in early August.
This will be the first time the Montejo beer, launched in 1960 in Mérida on the Yucatán peninsula, will leave Mexican territory in search of new markets. These days, Montejo is brewed by Cervecería Modelo, located in Tuxtepec, in the Mexican state of Oaxaca.
AB-InBev bought the rest of Grupo Modelo it did not own in 2013. In order to get anti-trust approval in the U.S., AB-InBev had to relinquish all the Modelo brands previously imported to the U.S. to its previous partner Constellation Brands. Montejo was not part of the deal, which is why it can now be brought to California, Texas, Arizona and New Mexico, where 70 percent of Latinos in the United States live.
Hispanics make up more than a quarter of the U.S. population today. Hispanic foods and beverages were an USD 8 billion market in 2012, according to consumer research firm Packaged Facts. By 2017, that number may reach USD 11 billion.
There’s obviously a growing consumer demand for Mexican beers in the U.S., due to demographics, of course, but also to price. Mexican beers tend to be cheaper than other imported beers because import costs are low. It helps that Mexican beers -- generally characterised by a light, crisp body and mild taste -- have “an aura of vacation and relaxation” that appeals to U.S. consumers, Euromonitor, a market research company says.
A-B does not yet have plans to expand Montejo beyond the Southwestern U.S., where most sales of Mexican imports occur. Which may be just as well. Montejo is entering a crowded marketplace. Competing Mexican brands already command more than 8 percent of overall U.S. beer volume, it was reported.
Corona Extra is the largest imported beer brand in the U.S. with more than USD 1.2 billion in sales last year in supermarkets and shops of various kinds. Modelo Especial, sister of the Corona brand, had the highest growth in the import segment in 2013 compared with the previous year.
All eyes are now on Constellation Brands and their response. To all appearances they do not seem fazed by A-B’s move. “It’s just another brand basically,” Robert Sands, CEO of Corona, Modelo and Pacifico importer Constellation Brands, said in July 2014 in response to analysts’ speculation on the planned launch. “So it doesn’t pose any particular threat to us that is different than anything else that has been done by any of our competitors in the past.”
A-B, based in St. Louis, is the leading brewer in the U.S. with a 47.6 percent share of American beer sales to retailers.
