Mexican Beer Market Essay Example | Topics and Well Written Essays - 2750 words

Mexican Beer Market - Essay Example FEMSA is one of the most dominant breweries in Mexico. They were founded in 1890 in Monterrey. They continue to work to be a world class organization that generates value through a customer focused business system. Currently they have: 6 brewing facilities in Mexico 8 brewing facilities in Brazil Over 23,000 employees Served approximately 320,000 retail stores in Mexico Annual growth rate of approximately 1,000,000 people The largest beverage company in Latin America serving more than 184 million consumers FEMSA's beverage operations include: *Coca Cola FEMSA which is the largest Coca Cola bottler in Latin America and the 2nd largest in the world based on sales volume. Fanta, Sprite, and Ciel are a few of more than 70 brands offered *FEMSA Cerveza is one of Mexico's leading brewers and major exporter to the U.S. The flagship brands include Sol, Dos Equis, Tecate, and Bohemia. *Oxxo convenience stores are the largest retail network in Latin America with over 4,800 stores in Mexico FEMSA Financial Track Record for 2006: Total Revenue = $11,625 million Oxxo Stores 28% Beer 28% Soft Drinks 44% CAGR 16% Total Operating Income =$1,599 million Oxxo Stores 9% Beer 35% Soft Drinks 56% CAGR 15% FEMSA 1st and 2nd Quarter Reviews FEMSA has done pretty well for the 1st quarter of the year. They experienced a revenue growth 9%. The breakdown of growth is 7% Coca Cola sales, 3.6% beer sales, and 10.8% income from operations. International operations doubled from 2006 creating the strongest growth. The least amount of growth in the beer division was caused by several factors: Seasonal increases of expenses such as marketing and raw materials in Brazil; A softer demand environment in Mexico; and a weaker pricing environment. During the 2nd quarter of 2007, FEMSA experienced a slight decrease in financial gain with a 7% revenue growth. Coca Cola sales increased 5.9%, beer sales increased 2.7% and income from operations increased 10.5%. Once again the strongest growth comes from international operations. The revenue reports from the first two quarters of 2007 are very favorable to a steady overall growth rate. While FEMSA has had marginal increases in revenue, they are focused on long term results over short term results. Mexico is FEMSA's largest market by far when factoring sales and profits. Their consumer base is