Beer Exports Fall for the First Time in 13 YearsBy Jan Hogewoning | Wed, 10/28/2020 - 12:16
According to the latest data from Banxico, Mexican beer shipments between January and August amounted to US$2.94 billion. This is 14 percent lower than the same period last year when exports of US$3.42 billion were recorded.
Bloomberg estimates that in 2020, US beer consumption, the primary export destination for Mexican beer, will fall by 3.7 percent. However, experts believe the primary reason for the drop in exports, La Jornada writes, is that beer production in Mexico was forced to a halt when the government did not recognize it as an ‘essential industry’. Mexico Business News reported on the decision of the country’s two largest beer brewers, Grupo Modelo and Cerveceria Heineken Cuauhtémoc, to close their plants in early April. According to data from Cervceros de Mexico, an organization which represent different beer companies, production dropped by more than 60 percent compared to the same period in 2019, as a result of this decision.
According to Banxico statistics, the pandemic may break a three-year streak of double-digit growth in beer exports. From 2016 to 2017, La Jornada writes, Mexican beer shipments grew from US$1.8 billion to US$2.6 billion, which represented growth of 42 percent. With 120 million hL a year, Mexico remains the fourth largest beer producer in the world, just below China (440 million), the United States (217 million) and Brazil (140 million).
Tequila and Mezcal Thrive
In stark contrast, tequila and mezcal recorded significant growth this year. Banxico statistics indicate that between January and August, exports amounted to US$1.47 billion, marking an increase of 16 percent compared to US$1.27 billion for the same period last year.
Unlike beer, tequila and mezcal production did not cease during the first months of the pandemic. During the first half of 2020, the Council of Agaveros of Jalisco reports, production of tequila grew by 4 percent to a total of 128 million L.
One tequila producer, José Cuervo, reported an increase of 186.4 percent in profit in 3Q20. This is almost triple of what it earned during the same period last year, going from US$34.6 million to US$135.1 million. The company reports that from July to September, sales grew 48 percent. Sales increased by 79.1 percent in the US and Canada, which represent 72 percent of its market. In the US, Bloomberg estimates, consumption of spirits will rise by 0.3 percent this year compared to 2019. In Mexico, on the other hand, spirit sales fell by 3.9 percent.