Fighting Corona: Heineken serves up Mexican challengers

By Published on .

Most Popular
Unable to beat back Mexican imports, Heineken will start selling them.

In reaching an agreement last week to market beers made by Mexico's Fomento Economico Mexicano (Femsa)-including Tecate, Dos Equis and Sol-the Dutch brewing giant is entering the hottest segment of the U.S. imported-beer market.

The deal gives Heineken more ammunition against Corona Extra, which in 1997 lapped the beer in the green bottle to become the country's biggest import. Corona Extra has more than four times the combined volume of the brands Heineken is picking up, but observers expect Heineken to find different ways to position the beers against Corona to slow it.

not about Corona

A Heineken spokesman denied that this deal was about beating Corona. "To say we're going to focus on one competitor is not accurate," he said. "Our goal is to [increase] the growth ... of all the brands in the U.S."

The top executive of one of Corona's two importers said the deal won't affect its plans. "We aren't going to change our M.O.," said Bill Hackett, president of Chicago-based Barton Beers. "I don't see that it changes much."

The Heineken spokesman declined to disclose details of the three-year agreement, which raises its import share to 26% from 20%. But observers expect Heineken to bring more focus to the brands than previous importer Labatt USA, which has a large stable of brands vs. the three brews pushed by Heineken USA: Heineken, Amstel Light and nonalcoholic Buckler.

Some also expect Heineken USA to be more aggressive and provide more marketing support, an area where Corona Extra is miles ahead of the competition.

The marketers of Corona boosted spending by 20% to $43 million in 2003, according to figures from TNS Media Intelligence/CMR. Corona shipments rose 5% in 2003 to 94.7 million cases, according to figures from Impact Databank.

By comparison, Tecate-the largest Femsa brand with shipments up 3% to 13.5 million cases in 2003-received $2 million in 2003, flat from 2002, according to CMR. Dos Equis, which posted shipments of 5.3 million cases, received $6 million, up from $1 million a year earlier. Sol, with shipments of 1.1 million cases, didn't get any support in 2003.

Under Labatt USA, Interpublic Group of Cos.' McCann-Erickson Worldwide, New York, handled Dos Equis and Publicis Groupe's Lapiz, Chicago, handled Tecate. The work is now up for review in wake of Femsa ending its joint venture earlier this year with Interbrew, according to executives with knowledge of the situation. Labatt USA was a unit of Interbrew.

In this article: