Concerns over immigration from our neighbors to the south have loomed large this primary season, with the GOP candidates in agreement regarding the dangerous exports of one country in particular: Mexico. However, before we erect more walls between us and our third largest trading partner, it behooves our would-be presidents to walk the streets of Mexico City, or tour the Baja California region, and see Mexico through the lens of its most recent market trend: craft beer.
In 2010, SAB Miller and ACERMEX (a trade association representing Mexican microbrewers) launched a complaint with Mexico’s Federal Competition Commission (CFC) castigating the two largest beer producers, Grupo Modelo and Cuauhtémoc Moctezuma, for abusing market power by forcing exclusivity agreements on their customers. (The duopolists, who control 98% of the Mexican market, provide incentives and disincentives to restaurants, bars, hotels and convenience stores that effectively keep their competition off the shelves.) After three years of debate, the CFC ruled in favor of SAB Miller and ACERMEX, though fell short of full market liberalization. Currently, the CFC guarantees open and unrestricted access to “on-trade” channels (bars, restaurants, hotels) and caps exclusive arrangements made on “off-trade” channels, (convenience stores) to 20% of market. The result has been a doubling of the total number of craft breweries and triple-digit growth for the larger Mexican craft brewers such as Cerveceria de Baja California (Baja) and Cerveceria Minerva (Minerva).
Historically, Mexico’s duopolists offered just two types of beer: standard lager and stout. But younger Mexicans, with their thirsty, youthful palates, demand greater selection and a quality product. Unsurprisingly, the west coast American beer culture has found a natural home in the Mexican state of Baja California, birthplace of Baja and their Cucapa line of beer. The selection of craft products is dazzling for a region with limited beer selection. Next to standard fare like Cucapa Clasica, a blonde ale, one can pick up Cucapa Chupabras, an American inspired pale ale, the Cucapa Barley Wine, or the Cucapa La Migra Imperial Stout. And while the combined craft beer market still holds less than 1% of the marketplace, it has been growing at more than 50% a year. Minerva, which started in 2004 with three employees, now has a staff of 48 and a new production facility that will likely push production beyond 1.5 million liters next year.
While beer consumption is declining in the developed world, the past twenty years of economic growth in Latin America has led to a burgeoning cultural shift, the effect of which can be seen in the demands of a middle class opting for premium products. Rather than picking up six-packs of Corona or a case of Tecate to bring back to a house party, Mexicans are now going to sports bars to root for their soccer teams and trying new beers by the pint. Of course, not all of these suds are craft, and there is indication that the international giants are setting up shop as well. While the CFC was debating for three years on what to do with the Mexican duopolists, something interesting happened: multinational brewers bought the duopolists (Heineken purchased Moctezuma in 2010; Anheuser Busch InBev (ABInBev) landed Grupo Modelo in 2013). Heineken and ABInBev, titans of the global Anglo-European beer market, have put serious chips on the table, betting that Latin American beer drinkers will fuel their growth for the next two decades. Both companies, while eyeing all of Latin America, found Mexico to be the ideal launching pad for leveraging their international brands and for attempting to fix Mexico’s now struggling domestic brands.
When it comes to beer, the craft connoisseurs say Americans just don’t get it. Right-thinking drinkers all know that bitter is better. But despite the explosion in the market for craft beers, which are often high-alcohol, hoppy ales, Americans still like their Bud Light. According to the Washington Post, there’s an explanation for our intransigence on IPAs: politics.
Budweiser Derangement Syndrome is a real problem for the 139-year-old brewer. Despite being a perfectly serviceable mid-priced beer (perfect for hot summer days, sporting events, and when one is too full to stomach an otherwise excellent Dogfish Head 90 Minute IPA), it’s pilloried across the Internet by bien pensant blogger types. (Here’s a representative and foul-mouthed example.)
President Obama gave a pre-Super Bowl interview in the White House kitchen to NBC's Savannah Guthrie, where the two talked about (and drank) beer:
Obama "agreed to spend a few moments with us live," said Guthrie, explaining that the rest of the interview will be taped and aired for tomorrow's Today Show. "We're in the White House kitchen, where, among other things, you brew beer."
The hot dog is in decline in America, writes Paul Lukas at Bloomberg, and one thinks, "What isn't?" What institution, anyway. If everything were not in decline, then what would there be for journalists to write about (see Andrew Ferguson on George Packer and Haynes Johnson) and what would politicians have to campaign about?
It's become an all too familiar tale: A naïve, amoral Westerner travels to Stalinist North Korea and returns with breathless tales of what a wacky, weird, and wild time he had there! (Somehow, the country’s extensive gulag never makes it onto the visitor’s itinerary.)
Senator Ted Cruz, joining in support of Rand Paul's filibuster, said today was the first day he had the chance to speak on the Senate floor. "It don't get no better than this," Cruz said, quoting a beer commercial:
A surprising anecdote from a White House pool report this morning:
Campaign official also offers up that potus was talking about white house beer, which apparently the white house brews, she said, and one cafe patron requested a bottle, so potus sent out to Ground Force One and gave him one.
And, in a subsequent pool report from press secretary Jay Carney's gaggle, we get this: