Although the alcoholic drinks market as a whole is growing strongly in Mexico, the country's consumption of spirits continued to decline in 2002, according to a new report from industry analysts Canadean.
The report estimates that consumption fell to a little over 190 million litres as Mexican tastes turn increasingly to beer and wine. While the spirits market has dropped by 12 per cent since 1998, consumption of beer and wine has increased by 13 per cent and 16 per cent respectively.
Although this makes for worrying reading for those involved in the market, the short term future offers some cause for optimism, according to Canadean .
Fuelled by significant new brand activity and the rejuvenated Bacardi Breezer, sales of flavoured alcoholic beverages are expected to rise by around 8 per cent in 2003. Driven by brands such as Absolut, vodka is enjoying an increasingly fashionable profile. Combined with the recent high profile launches of Gotland and Skyy, and the growing popularity of vodka:energy drink combinations, Canadean believes that the vodka category will exceed 1 million cases in 2003, an increase of 10 per cent.
Furthermore, sales of tequila are expected to rise as the recovering agave production drives down prices, encouraging the return of disenchanted drinkers.
High quality and increasingly aggressive sales and marketing initiatives employed by the top seven distributors, which include Pedro Domecq, Bacardi and Casa Cuervo, will further support the future performance of spirits.
It is worth noting though that the Mexican economy is highly reliant on the US, which attracts around 90 per cent of all Mexican exports. The US's continued "war on terror" and the associated hostilities could well lead to prolonged uncertainty in Mexico.
Despite sales of the three leading categories declining in 2002, tequila and mezcal has regained the market-leading position it briefly relinquished to "rum and cane spirit" in 2001. The report predicts tequila and mezcal sales of 5.9 million cases in 2002, some 29 per cent of the total spirits market. El Jimador is still by far the most important tequila brand with a healthy 21 per cent share of the market.
Sales of brandy also dropped to 5.3 million cases, but these three largest categories (tequila and mezcal, rum and cane spirit and brandy) totally dominate the Mexican spirits scene, accounting for almost 85 per cent of total sales.
Allied Domecq's "Presidente", a Mexican brandy, is still the clear overall best selling brand. Sales are an impressive 45 per cent higher than its nearest rival - the white rum "Bacardi Carta Blanca". Of the top ten brands, six declined in 2002. However, "Jose Cuervo Tradicional", "100 Anos Reposado" and "Cozadores Reposado", all tequilas, grew strongly.
The report from Canadean's Spirits Watch Service provides 381 pages of data assessing the market with analysis down to category and brand level.
For further details on The Spirits Watch Service - Mexico, click here.