MEXICAN MARKET OPPORTUNITIES
BY PETER WATTS
Following China, the United States and Brazil, Mexico is the world’s fourth-largest beer-producing country and the largest beer exporter. Its annual brewing output of 140 million hectolitres (mln hL) and exports of nearly 40 mln hL are extraordinary for a country of 130 million people. Though its population is only 40 per cent of the U.S.’, Mexico’s beer output equals 70 per cent of American production.
Mexico’s beer exports to the U.S. grew steadily throughout the 2000s, largely fuelled by the rising popularity of Corona. In 2013, this growth accelerated when Anheuser-Busch (AB InBev) acquired Grupo Modelo, the producer of the popular Mexican beer. Today, all Modelo products sold in the U.S. are manufactured in Mexico and exported across the border. In 2023, Modelo Especial became the No. 1 beer consumed in the U.S.
Mexico’s brewing industry is dominated by three companies: AB InBev (Grupo Modelo), Heineken (Femsa) and Constellation Brands. Together, they drive the industry’s immense growth and require approximately 1 million tonnes of malt annually. About half of this malt is imported from countries like Belgium, Canada and the U.S., while the balance is supplied by domestic maltsters.
Canada plays a significant role in this supply chain, serving as Mexico’s second-largest market for processed malt after the U.S. Over the past five years, Canadian processors have exported an average of 90,000 tonnes of malt to Mexico annually, valued at approximately $85 million.
While Mexico’s brewing industry remains a global powerhouse, potential trade disruptions such as U.S. tariffs could introduce significant uncertainties. If implemented, tariffs would likely increase the cost of Mexican beer in the U.S. This could reduce raw material demand and create ripple effects across supply chains. For Canadian barley and malt exporters, this emphasizes the need to address logistical challenges, manage price sensitivity and build trust in newer barley varieties among Mexican brewers and malt processors.
Mexico’s malting plants, which supply approximately half the malt needed by the country’s brewing industry, rely heavily on imported barley. Between 400,000 and 500,000 tonnes of malting barley are imported annually. Historically, France and the U.S. were primary suppliers. Australia has emerged as a dominant supplier in recent years. In 2022 alone, it accounted for 95 per cent of Mexico’s barley imports, valued at $145.1 million. This shift resulted from the trade dispute between Australia and China from 2020 to 2023. Australian barley farmers were forced to find alternative markets.
Mexico remains a promising market for Canadian barley, despite challenges such as logistics and price sensitivity. Historically, U.S. barley has entered Mexico via rail, benefiting from duty eliminations under NAFTA, while French barely leveraged cost-efficient freight routes from the port of Rouen to Veracruz. However, with more competitive grain export prices today and improving freight rates, Canada’s barley exporters are well-positioned to make inroads into the Mexican market.
A critical factor in seizing this opportunity is ensuring Mexican brewers and malt processors become familiar with Canada’s newer barley varieties. Although Mexican companies have purchased Canadian malt barley in the past, they are less acquainted with our newer options. Building familiarity and trust will require placement of these varieties in the hands of end-users for testing and evaluation.
Fortunately, Mexican brewers are accustomed to Canadian malt from newer varieties. The next step is ensuring Mexican malt processors can convert Canadian barley into high-quality malt. By addressing this hurdle, the Canadian barley industry can strengthen its position as a trusted supplier.
Mexico’s growing demand for malt and barley presents a substantial opportunity for Canada. However, navigating uncertainties like potential trade tariffs and shifting supply chains will require preparation and adaptability. With continued industry collaboration and end-user education, Canada can expand its share in Mexico’s dynamic beer supply chain. It can foster long-term partnerships in one of the world’s most vibrant beer markets.
Peter Watts is the CMBTC managing director.
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