TBY talks to Marc Busain, Managing Director of Cuauhtémoc Moctezuma, on the evolution of the Mexican beer market.
THE BUSINESS YEAR What is the background of the group’s operations in Mexico?
MARC BUSAIN The origin of the relationship between Heineken and Cuauhtémoc Moctezuma (CM) can be traced back to the late 1980s and early 1990s when Heineken provided technical assistance to CM. Later, at the beginning of the 2000s, Heineken became the US distributor of CM’s brands. At the beginning of 2010, Heineken acquired 100% of CM from FEMSA. The acquisition of CM had a huge relevance for Heineken. CM has an excellent reputation built over more than 120 years in Mexico. Heineken and CM share values on creating economic and social value. We take care of our employees, communities, and the environment, and we have a shared passion for quality. We brew great products and we have a focused agenda centered on our customers.
How did the acquisition broaden Heineken’s access to higher-growth markets, and how important is the market to the wider group?
European markets are very mature, and we expect growth to come from emerging markets in the following years. This is why investing in Mexico was obvious for us; we are talking about the second largest economy in Latin America and one of the most attractive and competitive beer industries in the world. The Mexican beer market is expanding. The share of beer in the alcoholic drinks market is around 70%, and 2 million people reach legal drinking age every year. CM’s volume is very important to Heineken as it represents roughly 15% of the company and we expect to continue outpacing the overall growth of Heineken.
How much of your production is sold domestically and what are your main export destinations?
About 90% of our production is sold domestically. Our main export market is the US, but we are experiencing interesting growth rates in Europe, Latin America, and Asia.
How would you characterize the Mexican market compared with other regional markets? Is the market for premium beers like Heineken increasing?
There are strong regional differences in Mexico in terms of consumer habits, branding, and packaging preferences. In Mexico the traditional off-premise retail segment continues to be extremely relevant for the beer industry. However, modern channels are also experiencing accelerated growth. The premium segment is underdeveloped compared to other countries, but we have seen excellent results with Heineken and our domestic premium brands, particularly in cities like Mexico City, Guadalajara, and Monterrey. We are confident that this segment will continue growing at an accelerated pace.
In what ways are regional consumer demands evolving?
Evolution in beer demand varies dramatically from region to region. However, the demand for light beers, which was high in the north, is now increasing in the center of the country.
What expansion plans do you have for Mexico?
Our plans are to continue to grow in Mexico and amaze our consumers with our product offering. We plan to increase our capacity if the demand for our products continues to grow at a relevant pace.
What is your outlook for 2013?
We plan to further accelerate our growth and to continue leading the innovation agenda of the industry and further develop our brands. Most importantly, we want our brands be the preferred choice of the Mexican beer consumer.
This interview will be published in 'The Business Year: Mexico 2013'. To pre-subscribe please e-mail us at email@example.com
© The Business Year - October 2012