Heineken and FEMSA sign ten-year import agreement for the U.S.
Happy with the outcome of their three-year probation period, Heineken USA and FEMSA Cerveza, Mexico’s number two brewer, agreed on a ten-year contract.
Heineken USA, the wholly-owned Heineken subsidiary, will continue to be the sole and exclusive importer, marketer and seller of the FEMSA beer brands, Dos Equis, Tecate, Tecate Light, Sol, Bohemia and Carta Blanca, in the United States.
According to a company statement, the agreement will become effective 1 January 2008 and will run until 31 December 2017. The new agreement sets the conditions for strong volume growth and brand development driven by increased marketing investment while providing attractive business and economic terms for both companies. Heineken says it will receive an increased share of the profits while FEMSA will get a payment for the exclusive distribution rights.
In 2006 the portfolio of Mexican beers of FEMSA accounted for 2.5 million hl of Heineken USA’s volume, or 25 percent, bringing the total volume up to 10 million hl of beer. In 2006, Dos Equis has grown 20 percent, Tecate 12 percent and the Dutch portfolio 14 percent by volume, says Heineken. The combined market share of the Dutch portfolio and the FEMSA Mexican portfolio in the imported beer segment in the U.S. is approximately 29 percent according to Heineken.
The Heineken USA brand portfolio includes the so-called “Dutch portfolio” - Heineken Lager, Heineken Premium Light and Amstel Light - and FEMSA’s brands. Through the combination of their brands both brewers have been able to expand their original geographical reach. Heineken has been able to participate more broadly in the Hispanic market, the fastest growing demographic group in the United Stares. In addition, Mexican beer has become more popular with non-Hispanic consumers.
Heineken reports that the Dutch portfolio, with traditionally strong performance in the North East, has achieved double-digit growth on the West Coast. FEMSA’s brands have grown out of their traditional stronghold in the south-western United States and expanded to the eastern part of the United States.
