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News Article

Beer Is Brewing Again, Will It Sell Enough?

By Jan Hogewoning | Tue, 06/02/2020 - 12:22

On Sunday, beer sales restarted at Mexico City’s Central de Abastos after a long period of suspension. Excelsior reports that the price of a box of 940ml bottles was MX$550 (US$25). Meanwhile, beer production in the city restarted, an activity which was recently designated as essential by the Mexico City administration along with others, such as construction. The news came at a critical time for many beer producers. For some, particularly microbrewers, it was already too late. In the first week of May, the Mexican chamber of artisanal beer brewers reported that beer sales among its members had dropped on average by 76 percent. The president of the chamber, Alejandro Magallanes, indicated that most artisanal brewers had been forced to lay off staff, while some had closed definitely. The beer brewers saw beer sales drop because of the closure of restaurants and bars, a primary sales channel. While beer brewing was halted early April nationwide, many artisanal beer brewers still had enough inventory to sell. However, this too, started to dry up by the start of May, Magallanes indicated. 

It is worth asking whether renewed beer production will be of big help to beer brewers, who in many cases still cannot benefit from major sales channel like restaurants and bars. Milenio reported on May 28 that in several cities around the country, including Monterrey and Guadalajara, restaurants had started to open for in-house service. The Mexican Chamber of Restaurants and Condiment Foods (CANIRAC) has indicated that municipalities around the country have implemented different rules and protocols for the opening of restaurants. The chamber released its own set of rules for restaurants in May and advised members to work at a maximum of 30 percent of seating capacity.

Mexico City is following a traffic-light system with the colors red, orange, yellow and green. Due to the pandemic, 45,000 restaurants were forced to close fully or partially in the city in the last three months, Mexico Daily News reports. Currently, the city is still in red according to the government’s traffic light, which means restaurants are still not offering dining area services. However, Mayor Claudia Sheinbaum has indicated the orange phase will start once the city’s hospital bed occupancy drops below 65 percent following a two-week downward trend. Milenio reports that the administration expects this stage to be reached in the last two weeks of June. However, cases are on the rise in the city and companies have no full certainty. Once the orange phase is reached, restaurants will be able to accommodate customers up to 30 percent of their capacity and will have to follow strict sanitary measures. The green phase will be reached once hospital bed occupancy drops below 50 percent following another two-week downward trend. At this stage, restaurants will be able to fill up to 60 percent of their capacity. For bars and clubs, a primary sales channel for artisanal beers, the situation is gloomier. The Mexico City administration has delayed their reopening date as far as September, El Universal reports.

The data used in this article was sourced from:  
Mexico Business News, Milenio, El Universal, As, InfoBae
Photo by:   Pixabay
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst

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