Value chain of the brewing industry in Mexico

Abstract

In Mexico, beer production is a highly relevant industrial activity due to the generation of jobs and its multiplier effects on the economy. As proof of this, in 2019 were produced 124.5 million hectoliters of this drink, making Mexico the fourth largest producer worldwide. This research aimed to analyze how the barley-malt-beer value chain is articulated. For this, the links given between the actors are examined and described, emphasizing the role of the two main brewing industries installed in the country in its governance area and the effects on farmers.

Methodology: Part of the methodology of the Economic Commission for Latin America and the Caribbean (ECLAC) was used for the diagnosis of the value chain, as well as the methodology proposed by the Food and Agriculture Organization of the United Nations (FAO) for the analysis of sustainable food value chains. Information was collected from a literature review and semi-structured interviews were conducted to key stakeholders.

Results: The value chain of the brewing industry in Mexico is made up of five links: 1) primary production, 2) barley grouping, 3) transformation, which involves obtaining malt from barley and subsequently processing the malt to obtain beer, 4) distribution, and 5) final consumption of beer. The chain’s governance is focused on two industries that form a duopoly that, since 2010, became part of the first and second beer group worldwide.

Conclusion: The barley-malt-beer value chain in Mexico has functioned successfully at the national level, as the industry effectively maintains most of the actors that comprise it, which has favored its competitiveness in the international arena. However, once the acquisition of the two Mexican brewing groups by transnational companies was consolidated, it was evidenced that the sector with the greatest fragility and weak linkage to the chain was that of small farmers, who resort to intermediaries to sell their barley grain.