¡Salud!: Export opportunities in the Mexican alcohol market

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By Vichael Angelo Roaring / Trade Service Officer / Philippine Trade and Investment Center-Mexico / Foreign Trade Service Corps

THE average Mexican downed 64 liters of alcoholic drinks in 2014. That’s roughly the amount of water required to fill up a decent-sized kiddie pool.

And, according to Euromonitor International, this will continue growing to almost 70 liters per person per year come 2019. With a population of around 123 million people, that’s an untapped market Filipino alcohol exporters shouldn’t ignore.

And, according to Euromonitor International, this will continue growing to almost 70 liters per person per year come 2019. With a population of around 123 million people, that’s an untapped market Filipino alcohol exporters shouldn’t ignore.

The year 2015 saw a rise in alcohol consumption in Mexico, particularly because there are more and more international brands entering the market and giving the consumers more choices. Lifestyle trends, such as an increase in households’ average income boosted by more women getting full-time jobs, also contributed to the sector’s positive growth.

Beer is still the favorite alcholic drink in Latin America. Of that 64 liters of alcohol drank in 2014, 53 percent of it was downed as cerveza. The drink has a rich history in Mexico and brings in around $20 billion to the national economy. Mexico is the seventh-largest beer producer in the world, and the top exporter, but they also import a lot of it to meet local demand, from 142 million liters imported in 2007, to 256 million liters in 2015.

The beer market has been traditionally held by two local brands: Heineken Mexico and AB InBev; but in the last few years, craft beer and international brands have been slowly pushing back with their innovative and exotic flavors and packaging.

After beer, vodka and whiskey take up 32.6 percent of the market. Between 2010 and 2015, whiskey consumption has risen by 142 percent and is preferred by the growing middle class, incorporating it as a status symbol; while milennials—which make up about 30 percent of Mexico’s population—prefer vodka over what they consider drinks their parents prefer. Rum sales have stagnated for this reason, but it still saw a 3.5-percent growth in 2015. Tequila, an original product of Mexico, but which unfortunately used to suffer from the label that it was a poor man’s drink, is making a comeback, and is projected to become one of the favorite spirits of the middle to upper class.

The trend here seems to be taking traditional drinks, such as rum and tequila, and rebranding them as premium or artisanal—this will not only attract the younger crowd, but reinvigorate the current market. International brands are coming in and doing this: In the last few years, we’ve seen Heineken, Stella Artois and other brands enter the Mexican market and even partner with local producers and distributors in order to get their foot in the door, and then implementing aggressive marketing campaigns to get their messaging in.

That’s not to say Filipinos haven’t been making a splash in the region. Global liquour company Emperador Inc., owned by Filipino tycoon Dr. Andrew Tan, purchased through its Spanish subisidiary major Mexican brands such as Presidente (Mexico’s number-one selling brandy), Azteca de Oro, and Don Pedro. Not only does this make Emperador the largest brandy producer in the world; it also paves the way for Filipino exporters to possibly tap the Mexican and Latin American market.

Our exchanges in the alcoholic sector go beyond the present. In the State of Colima, located in the middle of Mexico´s Pacific Coast, a fermented coconut drink called tuba (pronounced too-bah, like the musical instrument), continues to be produced and drunk by locals as a potent libation.  Filipino sailors are said to have taught locals how to ferment the coconut drink, a gift  of the Filipinos to the people of Mexico – a product of the commercial and cultural exchanges made during the days of the Manila Galleon Trade.

Fast-forward to 2016. The Department of Trade and Industry has recognized the importance of Mexico as its strategic gateway to opportunities in Latin America. DTI has recently opened its trade office in Mexico City, its first in Latin America,  and has assigned Trade Service Officer Vichael Angelo Roaring as Commercial Counsellor to facilitate and develop trade and investment opportunities for the Philippines in the region.

The Philippine Trade and Investment Center (PTIC) in Mexico City, in partnership with the Export Marketing Bureau, can assist would-be exporters who want to take a look at Mexico as an export market. For more information, you can contact PTIC Mexico at [email protected] or +52.55.5280.4072, or the Export Marketing Bureau at [email protected] or +63.2.465.3380.

 

 

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