FEMSA gaining share in Mexican market

Modern Brewery Age,  Jan 10, 2005  

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Analysts say that Mexico's number two brewer, FEMSA, is on track to gain share from Grupo Modelo this coming year. FEMSA seems to have gained about two share points from Modelo in 2004, though Modelo remains dominant, with 55% share of the market to FEMSA's 44%.

But the Monterrey-based FEMSA is on the march. In 2005, FEMSA is expanding its Oxxo convenience store chain, and is planning to optimize its distribution system.

"Femsa has been gaining ground on Modelo and (beer) sales in its Oxxo stores are going to continue to benefit," Marco Reyes, an analyst at Scotiabank Inverlat in Mexico City told Reuters.

FEMSA now operates more than 3,000 Oxxo stores, which sell FEMSA beers and Coca-Cola, which FEMSA bottles. FEMSA ultimately plans to open as many as 10,000 Oxxo stores in Mexico. Modelo has its own convenience store chain, Extra, but only has about 500 outlets. FEMSA also may consolidate its beer and soft drink distribution channels. This would cut costs, and create new efficiencies.

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