Jaime Costa
Director General Of Bln
BLN
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View from the Top

Consumer Preferences Determine Industry Trends

Mon, 08/13/2018 - 11:30

Q: In which segment has BLN developed the most, wine or spirits?
A: The wine segment is experiencing greater growth and Mexican wine, specifically, has seen significant market expansion. Most Mexican wines are enjoying double-digit growth and for the first time, they are outselling Spanish labels. Within the spirits category, gin, tequila and whiskey have been solid performers. It is interesting to see how Mexican preferences have evolved from just a few years ago when brandy and rum led the market. We have seen an increase in what is known as “value whiskies” or economical whiskies, which are products that do not surpass the MX$150 mark (US$7.75). In the case of tequila, we are also seeing significant growth, particularly in the crystalline category. These changes are the result of the investment made by tequila and whiskey manufacturers in recent years.
Q: What role does BLN play within the ecosystem of spirits commercialization?
A: BLN is focused on transforming the Mexican market into a premium market; our portfolio includes several of the highest-consumption tickets in the market, such as Glenfiddich, Hendricks and Torres. We have a really good portfolio with high-value products. For instance, in the wine segment, we are value leaders thanks to our Matarromera and Torres products. We are also leaders in the gin category thanks to Hendricks, in the brandy segment with the Torres brand and in the malts segment with Glenfiddich.
Q: What strategies does BLN use to maintain its leadership in the premium segment of the spirits category?
A: We have clearly identified what restaurants or places can help us with brand recognition and we focus on these. These consumers are key in generating trends. The idea is to break through in the upper part of the population pyramid and work downward, attracting more consumers. We also take notice of the success other products are enjoying in other parts of the world and work to introduce them to the Mexican market. For instance, we have just introduced Tito’s, an artisanal vodka from the US that is the best-selling brand in that country. It sells around 8 million cases and in Mexico we expect to sell over 15,000 boxes in the first year.
Q: What actions has BLN taken to conquer positioning challenges in a market as competitive as Mexico?
A: Taking note of what is happening around the world is the most important factor. Another strategy has been to approach younger consumers. We have done significant work to promote responsible consumption and like many other spirits companies in the country, we are associated with the Social Researcher Foundation (FISAC), an NGO that promotes responsible alcohol consumption. We are also trying to give brandy a new and youthful look. To that end, we are launching a Torres can that is ready-to-drink.
Q: How do you expect consumption trends to develop in the coming years?
A: I think preference for expensive tequila will continue to grow. The tequila segment occupies over 30 percent of the total spirits market but we have seen predominance of products called “agave distillates” that are not tequila and are sold at incredibly cheap prices. These products have grown a great deal, selling about 6 million boxes per year, which has negatively impacted the effort to popularize the tequila brand. The cost of agave has also been a challenge. Agave went from MX$4 (US$0.21) per kilogram to MX$22 (US$1.14) per kilogram in 2018. I think this price phenomenon will correct in a few years.
Q: What opportunities does BLN see in the repositioning of traditional Mexican drinks like mezcal?
A: We see great opportunities in the mezcal category. We are already working with two brands of mezcal. We are associated with Montelobos, a top brand in the Mexican market, and Gusano Rojo, which has been in the market for over 40 years. Mezcal is showing steady growth but it has a very small base. Younger consumers are learning to drink mezcal and it is this demographic that is driving the trend for mezcal and wine.

 

BLN is a Mexican wine and spirits distribution company that has been in the market since 1946. It distributes premium brands, such as Ron Flor de Caña, William Grant & Sons, Disaronno, Grupo Matarromera and Monte Xanic