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According to By Stocksak, Mexican craft beer will continue to grow despite its high costs.

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© Stocksak. FILE PHOTO Xokohuetzi craft beers and Jabali craft brews are displayed at a Mexico City restaurant, June 20, 2017. REUTERS/Henry Romero

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MEXICO CITY, Stocksak – Mexico’s craft beer market should grow by more then 10% this year, ACERMEX, Mexico’s brewing association, stated on Friday. However, it faces rising costs and fierce competition from European-owned heavyweights.

Jose Rosas, an ACERMEX official, stated that the pandemic effects and war between Russia Ukraine had caused costs to skyrocket.

“Most of the supplies required for independent beer producers are imported so the rising exchange rate and the high cost of supplies are a problem.”

ACERMEX anticipates that craft beer production will grow 11% this fiscal year to reach around 34 million litres (59,000,000 UK pints). Close to 90% of the beer will be consumed in the same area it was brewed.

According to the trade group Mexican craft brewers produced approximately 30 million litres (53 Million Pints) of the 13.5 Billion litres of beer made in Mexico last year.

ACERMEX data indicates that this brought them close to 2 billion pesos ($100 millions) in sales.

According to the report, craft brewers are also under pressure from large industrial breweries that are expanding in the country. Heineken, a Dutch giant, dominates the market (OTC:), and Grupo Modo, which is owned by AB InBev.

Heineken announced that it would build a 1.8 million peso can manufacturing facility in Chihuahua in northern Mexico. It is located near its Mequoi brewery. This will be the seventh Heineken plant in the country.

Heineken reported in its last quarter that there was growing demand for its Amstel brand and low-alcohol brands. AB InBev, on the other hand, said it was expanding distribution to hundreds of Mexican convenience stores. Both companies are posting strong profits despite rising cost.

($1 = 19.9090 Mexican pesos

https://www.investing.com/news/stock-market-news/mexican-craft-beer-to-gain-ground-despite-soaring-costs-says-trade-group-2918867

Stocksak Editorial

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