Mauricio Leyva Arboleda : Interview

Interview : Mauricio Leyva Arboleda

What are the main structural strengths of the brewery industry in Mexico?

MAURICIO LEYVA: Today, Mexico is the fourth-largest beer producer globally after China, the US and Brazil, even ahead of traditional beer-producing countries such as Belgium, Germany and the Netherlands. The country’s strengths lie in internal consumption, with a population of nearly 130m people and infrastructure that allows for easy export to global markets, many of which demand Mexican beer brands. In terms of sales, the industry continues to post strong growth, above the global average. Some plants have posted double-digit growth for the past three years, which reflects strong demand in both the national and international markets. This means that brewers of all sizes in Mexico are expanding their operations to ensure they stay ahead of the demand curve. Although brand identity remains strong in Mexico, with local beers forming the mainstay of the market, there has been noticeable and solid growth among a number of foreign-branded beers on the market.

What energy- and water-saving measures are being implemented in the industry to boost sustainability?

LEYVA: In light of the high growth figures in beer sales, and given the high rate at which raw materials and energy are consumed in the production process, large agri-business companies often tend to be the most innovative in terms of energy and production efficiency. New systems using aerobic and anaerobic processes mean that 100% of the water consumed, around 2.8 litres per litre of beer produced, can now be redistributed to other beer-making processes or sent back to the original source as clean, treated water.

In addition, a number of Mexican breweries are at the forefront of a renewable energy drive. As with many other firms with industrial plants in the country, they plan to produce much of their electricity through renewable sources. For example, a plant in Hidalgo intends to have 100% of its energy supplied by renewable sources by 2025. Such progress has been assisted by companies such as Spanish renewables firm Iberdrola, which underlined their 15-year commitment to provide renewable energy to the industry in a memorandum of understanding with Grupo Modelo in 2017. Overall, this was made possible by the country’s energy reform and its wholesale electricity market initiative.

How strategically well equipped is the state of Hidalgo to locate a brewery?

LEYVA: The state of Hidalgo has a number of competitive advantages that make it ideal for the location of an industrial plant, particularly a brewery. Two key factors are its central location between the Atlantic and the Pacific coasts, and infrastructure that connects it with Mexico City and the Bajío industrial region. Its human capital is also an advantage for firms, especially those looking at large-scale projects, as there is almost an oversupply of human capital given its lower level of development compared to other states. The local government has been instrumental in creating alliances between the private sector and academia to ensure the state’s labour force has the correct techniques for agri-business projects of such magnitude.

One of the most important supply-chain advantages is the state’s agricultural production heritage. In particular, within 30 km of where the landmark $800m brewery will be located, is the municipality of Apan, which has the highest levels of national barley production. On the national scale, there are three key reasons why Mexico is a central partner for the beer industry: first, unlike many Latin American markets, it has posted sustained, solid economic growth for a number of years. Second, it has a consistent monetary policy due to sound, independent fiscal administration that provides investor certainty. Third, and above all, Mexico – especially Hidalgo – provides investors legal certainty, ensuring their investments are secure and well established in the long term.