Mexico and Mexican beer offer huge potential for Heineken

23-Nov-2015 - Last updated on 23-Nov-2015 at 10:06 GMT

Heineken Americas' president believes Mexican beer has huge potential for the company.

Mexican beers and expansion in the Mexican market have strong potential for growth for Heineken, according to a company executive.

Marc Busain, president of Heineken Americas, said that while Heineken currently holds the No. 2 position in the US, Mexico and Canada, there is still room to grow. One area that offers especially good prospects is Mexican beer, he added, speaking during the company's recent 'What's Brewing' seminar.

Heineken’s Mexican brands, which include Tecate and Dos Equis, have seen 6.5% annual growth in the US from 2010 to 2014. These brands were a big reason for the company’s recovery in the Americas after some rough years, and Busain believes their upwards trajectory can continue. Tecate especially, he said, has “huge potential across the world”.

Focusing on growth south of the border

Since 2008, the company has had hard years due to the recession in the US, Busain said. Mexico has played a big role in the turnaround, as the growing premium market has helped the company see a 52% yearly growth in the country from 2010 to 2014.

“There is an exciting potential in the premium segment,” he said, eyeing up an opportunity for even more growth.

Tecate has played a large role in the company’s growth in Mexico, as Busain said it has become the No. 1 preferred brand of beer in the country. While it is not yet the biggest brand, he said this has gone a long way in helping revenue increase at 6% per year and profit growing at 20% per year from 2010 to 2014.

Currently, Heineken has six breweries in Mexico with a seventh coming soon.

Craft opportunities

In addition to the boom of Mexican beer in the US, Busain believes the company’s purchase of Lagunitas Brewing Company will help in the craft beer space. The company has always been hesitant to enter the craft beer world, he said, but believes Lagunitas offers great potential to expand inside and outside of the US.

Additionally, he said Heineken’s ownership of Strongbow gives great potential for development in the cider market and believes the company’s Red Stripe brand may end up showing surprising appeal in the coming years.

“I can tell you that when you look at what drives the beer market in the US, it’s imported Mexican beers, imported premium beers, craft beers and new flavors,” he said. “We have the portfolio in the US that perfectly fits those growth trends … for every growth trend, we are well positioned in our portfolio.”

Moving forward, Busain said Heineken will focus on organic growth but will not be averse to inorganic growth, should the right opportunity arise.

“I do believe that there is a very positive outlook in the Americas going forward,” he said. “We know how to sell premium beer and how to grow that category. That segment in the Americas, as we speak, is still underdeveloped.”