Mexican Artisanal Beer in Survival Mode

Last week it was reported that according to a poll conducted by the Association of Mexico’s Artisanal Brewers (ACERMEX), 50 percent of artisanal brewers could go bankrupt if the COVID-19 contingency measures last for four months. A month in, this time span has now reduced to three months. According to El Economista, 25 percent of artisanal brewers had already shut all operations by April 5.

The alarming news does not come as a surprise as bars and restaurants represent 95 percent of artisanal beer sales. In their statement, ACERMEX informed that since the start of the crisis, sales of its members have dropped by 76.8 percent on average. This would amount to a 50.5 percent contraction in revenue expectation for this year in comparison to 2019. Before the crisis, the chamber estimated that the artisanal beer sector would reach a 1 percent share of the Mexican beer sector by 2021. However, this projection has now been reduced to 0.5 to 0.25 percent.

The total amount of artisanal beer breweries in Mexico amounts to almost 1,000. The association stated that in the second week of April, about 55 percent of brewers were still expecting that they would not need to lay off staff. However, with dropping sales, this perspective is now changing. The sector employs around 7,000 people. Indirectly, it impacts countless of other jobs across the value chain. This includes suppliers of bottles, bottle caps, labels, boxes and the ingredients for beer, such as malt and hops.

While the impact will no doubt be harsh, the challenge is now to find other sales channels to reach the customer, states ACERMEX. The association pointed out that some brewers are using online platforms to sell the inventory they still have after halting production. The association expects that this could change the business model for artisanal brewers permanently.