E-Malt.com News article: USA: Heineken and FEMSA sign ten-year import agreement for U.S.A.

Heineken N.V. and Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) announced that Heineken USA and FEMSA Cerveza have extended their existing three-year relationship in the United States for a period of ten years, according to Heneken’s press release, April 26. Heineken will continue to be sole and exclusive importer, marketer and seller of the FEMSA beer brands, Dos Equis, Tecate, Tecate Light, Sol, Bohemia and Carta Blanca, in the U.S.A.

The agreement will become effective 1 January 2008 and will run until 31 December 2017. The new agreement sets the conditions for strong volume growth and brand development driven by increased marketing investment while providing attractive business and economic terms for both companies. Heineken will receive an increased share of the profitability while FEMSA will receive a payment for the exclusive distribution rights.

Massimo von Wunster, Heineken N.V. Regional President of the Americas commented: “The relationship with FEMSA has been very successful for both companies. Our volume growth in the U.S.A. has significantly accelerated as a result of the powerful combination of Heineken’s Dutch and FEMSA’s Mexican beer brands. This new agreement will enable us to further increase our market share in the high-margin import segment in the U.S.A.”

Luis Duran, VP International Markets, FEMSA Cerveza, said: “Our relationship with Heineken USA has succeeded beyond our initial high expectations. Our portfolios truly complement each other, offering consumers the best choice in quality beers. This year, we are looking to leverage the top-notch sales execution and insights of Heineken USA to grow the Dos Equis brand and launch Tecate Light. In the longer term, we are confident that this is the right relationship for us to capture the exciting opportunity that this market continues to offer.”

Strong marketing and sales execution and a continued focus on driving quality and innovation have contributed to the excellent performance of Heineken USA in 2006. The portfolio of Mexican beers of FEMSA accounted for 2.5 million hectolitres of Heineken USA’s volume, bringing the total volume to 10 million hectolitres. In 2006, Dos Equis has grown 20%, Tecate 12% and the Dutch portfolio 14% by volume. The combined market share of the Dutch portfolio and the FEMSA Mexican portfolio in the imported beer segment in the U.S.A. is approximately 29%.

The Heineken USA brand portfolio includes the Dutch portfolio - Heineken Lager, Heineken Premium Lightand Amstel Light - and FEMSA’s brands. Through the addition of the FEMSA brands Heineken USA has been able to participate more broadly in the Hispanic market, the fastest growing demographic group in the U.S.A. In addition, Mexican beer has become more popular with non-Hispanic consumers. The relationship has also given a better regional balance to the overall portfolio.

The Dutch portfolio, with traditionally strong performance in the North East, has benefited from the agreement and achieved double-digit growth on the West Coast. FEMSA’s brands have grown out of their traditional stronghold, the Southwestern United States and expanded to the Eastern part of the United States.


27 April, 2007