The beer industry currently accounts for 52% of all alcohol sales in the U.S. according to beerprofits.com. At the same time, Beer is 85% of all of the consumption of beer, wine, and liquor in the U.S. Since 1983, the beer consumption has risen by 17.2% from 186 million barrels to 218 millions barrels. The expected growth projects that the industry will be up to 220 million barrels by 2011. In previous years, beer’s core segmentation was age group 21-27, this demographic bottomed out in the late 1990’s to early 2000’s, but projections are showing that this core demographic will be the top demographic again by 2010 according to beerprofit.com. Studies have shown the 40% of the adult market are expected to be regular beer consumers by 2011. This paper will discuss Medelo’s international expansion through strategic partnerships, next steps into a foreign market for Modelo, challenges from InBev, Modelo’s direct competitor, and whether Modelo should diversify its business. (HTB, 2008)
Modelo’s International expansion with Strategic Partnerships
Grupo Modelo is the biggest brewer in Mexico and is based in Mexico City. Model has built several breweries in states throughout Mexico for logistics, warehousing and transportation strategies. Grupo Model best known product is Corona, while it best selling brand is Corona Light. Within Mexico, their biggest selling brand is Modelo Especial which is a premium pale lager that's more comparable in quality to Dos XX than its lightweight Corona. Most beers sold in Mexico are standard light bodied lager brews that are similar to U.S. and Canadian lagers. Especial are sometimes viewed as a "premium" brands, while Pacifico has a certain cachet on the Pacific coast, and Corona and Sol are both super light bodied brands with painted labels and that appeal to a "fun in the sun" kind of marketing mentality.
In 1985, Grupo Modelo started exploring other markets, first Canada...