Trends in Global Beer Markets Modelo

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The next trend was of mergers. Big players like Interbrew of Belgium and AmBev of Brazil merged to build the world’s largest beer-producing company, InBev in 2007. As a result of these mergers, there were just a few huge breweries that dominated the world market. These included InBev, Anheuser-Bush, SABMiller, and Heineken.The beer industry also saw vertical integration where the breweries acquired the raw material supplier unites as well as took on to distribution and retailing. The backward integration was necessary owing to the large production and maintenance costs that were needed for the production operations.United States became the second-largest consumer of beer after China in the year 2003, though per capita consumption in the US exceeded 6 times that of China. Mexico continued as one of the world’s largest beer markets.Modelo had started as a local producer and seller of beer in the Mexican market. With the local competition warming up due to FEMSA’s adoption of the distribution-to-seller approach in the beer business, Modelo had to look towards the US market for survival and profits. Even within the US, the presence of large players like Heineken and Anheuser-Busch meant that Modelo could only play a sidelined role in the beer market. However, using an innovative distribution strategy and completely novel marketing communication and advertising strategy, Modelo was able to drive itself to the height of becoming the largest imported brand of beer in the US.With the beer market becoming more and more consolidated across the world and also in the US. This led Modelo to further modify its strategy of selling in the domestic or the US market alone and foraying into the International market. The globalization and liberalization trends in the world economy lead to foreign beer companies make a foray into the Mexican domestic beer market. This trend meant that there could be a threat to the dominance of the indigenous players.