Mexico's Femsa rolls out plan to win beer drinkers
30 Apr 2003, 4:28pm ET- - - - -
By Chris Aspin
MEXICO CITY, April 30 (Reuters) - Mexico's Femsa (NYSE:FMX), Latin America's largest brewer and soft drinks bottler, is campaigning to stem a trickling loss of beer market share to its local rival Modelo (MEX:GMODELOC) by selling existing brands in new formats and new markets.
Sergio Saenz, director of Femsa's beer division, on Wednesday told a conference call with analysts to discuss first-quarter results that at least three of the company's beers will be launched in new zones of Mexico in different sized bottles or in cans.
Saenz said this month Femsa started selling its Indio brew, a dark beer, in eight central Mexican states in a 32 ounce bottle, known as a "caguama" after a huge turtle of the same name. Indio caguamas are already sold in Mexico City.
"In central Mexico we have analyzed our portfolio and determined that in the 32 ounce presentation we are what you would call under-indexed to the industry ... we have less than our total share" in that beer size, Saenz said.
Indio, which makes up 6 percent of Femsa's (MEX:FEMSAUBD) domestic beer volume sales but has been Femsa's fastest growing brand in Central Mexico for at least three years, will also be sold in a tiny seven ounce format, Saenz said -- a popular size for drinkers who do not like letting their beers get warm.
Femsa's Superior beer, one of the Monterrey-based company's top selling brands especially in southern Mexico, is also to be offered in a 12 ounce can.
"In the south east we are doing very well with nonreturnable glass, but we are under-indexed in cans," Saenz said. "You will see us soon come out with a 12 ounce can of Superior that has not had a can presentation."
CARTA BLANCA COMING IN CANS
Femsa also plans to bolster sales of Carta Blanca, another top-selling brand especially around the company's roots in northern Mexico, by offering the beer in cans instead of its standard bottle format.
"That is the sort of thing you are seeing us doing," Saenz said. "In northern Mexico, we also will be launching the Carta Blanca can."
The initiatives after Femsa's beer division reported another weak quarter.
Total beer sales volumes in the January-March period fell 1.8 percent, with domestic volumes dropping 1.8 percent to 4.841 million hectoliters (a hectoliter is 100 liters), Femsa said earlier on Wednesday in its first quarter earnings report.
Femsa directors told the conference call with analysts that beer volumes in northern Mexico dipped 2.8 percent in the quarter, central zone volumes dropped
4.2 percent and southern region volumes grew 2.4 percent."Quarter to quarter it looks like we lost seven tenths (of a percentage point of market share)," Saenz said.
Femsa gave no overall figure for their Mexican beer volume market share.
Modelo, maker of the Corona beer which is the top selling foreign brew in the United States, reported on April 22 a 1.2 percent increase in domestic beer shipments in the first quarter.
Mexico City-based Modelo claims a 56.9 percent share of the national beer market making it the No. 1 Mexican brewer.
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