Image credits: Patrik Kristian
/
News Article

Beer Production Back at 80 Percent

By Jan Hogewoning | Mon, 08/10/2020 - 17:04

Two months after the reactivation of the beer supply chain, beer distribution is back at 90 percent compared to pre-COVID-19 levels. Production capacity has reached 80 percent and exports are at 70 percent, all according to data from Cerveceros de Mexico, a national brewer association. The Mexican beer industry, which employs 55,000 people directly and 600,000 indirectly, was practically suspended for two months from early April onwards. Early June, the industry was given approval to resume production activities. However, beer consumption in restaurants and bars has not been able to return to pre-pandemic levels, yet. The same can be said about demand abroad, mainly from the US.

According to Milenio, the Mexican beer sector produced 124.million hL of beer in 2019. 40 million hL were exported to 180 countries. This makes Mexico the largest beer exporter in the world and the fourth-largest producer in volume. The shutdown had a devastating effect on exports, bringing them down 32 percent in April 2020 compared to April 2019, with a total of 2.8 million hL exported. Overall, exports dropped 19 percent in the first five months of the year, Banxico reports. Unlike Mexico, many other countries did not suspend beer production.

While the entire beer industry has suffered, the artisanal beer sector was without a doubt hit the hardest. This sector was flowering before COVID-19 struck, with an average annual growth of 53.29 percent and a total production volume of 189,250 hL in 2018. Before the pandemic, Mexico counted more than 900 independent artisanal beer brewers, according to Mexico’s Association of Artisanal Beer Brewers (ACERMEX). However, 95 percent of their sales channels are restaurants and bars, says ACERMEX, which due to the mass temporary shutdown were practically unable to sell craft beer over the past few months. MBN reported in May that beer sales among ACERMEX members had dropped on average 76 percent. The president of the chamber, Alejandro Magallanes, indicated in early June that most artisanal brewers had been forced to lay off staff, while some had closed for good. While the exact numbers of definite closures have not been released, Magallanes reiterated that survival will the be main priority for many artisanal beermakers for the rest of the year.

 

The data used in this article was sourced from:  
Milenio, Mexico Business News, Vanguardia
Photo by:   Patrik Kristian
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst