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Mexican microbrewers struggle to get ahead

COLUMN ONE

Craft beer makers are up against two giant firms that dominate the market. But they persevere, even if bars and restaurants are unwilling to stock their brews.

April 17, 2011|By Ken Ellingwood, Los Angeles Times
  • Production of Cosaco beer is a drop in the bucket compared with that of U.S. microbreweries: just 3,200 gallons a year.
Production of Cosaco beer is a drop in the bucket compared with that of U.S.… (Dominic Bracco / For The…)

Reporting from Mexico City — It sounds like a movie where high jinks ensue: A teetotaling Mexican hotel worker travels to England, befriends a whisky-drinking Irishman and scrubs toilets in a pub while learning to brew killer beer.

Such is the odd path Jose Morales has taken since a sweltering day five years ago when he found himself wondering how to make a beverage he doesn't even drink. The daydreaming has led Morales, then a hotel warehouse manager, to an unlikely new calling as a beer maker.

Morales, 36, is among a burst of Mexican brewers who are testing recipes and investing in imported equipment in hopes of finding the same formula for success that microbreweries north of the border have found.

Mostly self-taught, the Mexican brewers have launched an array of offerings, from Belgian-style wheat beers and imperial stouts to an ale aged in tequila barrels. They want to translate a hobby into commercial success in a country that is increasingly quick to embrace foreign trends, from smartphones to designer coffee.

"There's a niche. People are looking for something different," said Jaime Andreu, commercial director of the Primus Brewery and spokesman for the Mexican microbrewers association, which has 16 members.

Some brands of cerveza artesanal have won awards abroad. But the entrepreneurs have found that peddling fancy $4 beers in Mexico means battling a couple of Goliaths.

Although Mexicans are among the world's leading consumers of beer, guzzling about 16 gallons a year per person, microbrews are dwarfed by two huge companies that dominate the $15-billion market at home and make most every Mexican brand known abroad, from Corona to Dos Equis.

The newcomers say the vast majority of restaurants and bars in Mexico are off-limits because the establishments have agreements to buy only from one of the two giants, Grupo Modelo or Cuauhtemoc Moctezuma, in exchange for equipment and discounts.

The small brewers often have to import ingredients and even bottles, making their product considerably more expensive than the big-name beers. Moreover, they lack the kind of tax breaks that have given beer makers in the United States a chance to survive infancy.

For every 100,000 beers drunk in Mexico, only eight are craft beers, according to the microbrewers association.

"Basically we're working against the system," said Jesus Briseño, who owns the Guadalajara-based Minerva Brewery, which makes Imperial Tequila Ale and five other beers. "We have all the odds of dying in battle."

The entrepreneurs have sought to tap into the Facebook generation to promote their beers, and two have opened stores, part beer boutique and part pub. So far, though, sales are modest.

The struggle hasn't stopped Gustavo Gonzalez, a brewing pioneer who produces three ales — an amber-toned pale, Belgian-inspired red and caramel-hinted porter — in a former tortilla factory on the southern end of Mexico City.

Gonzalez was a marketing student when he tried American craft beers during trips to Austin, Texas, in the 1990s. Before long, he was schlepping ingredients and home-brewing equipment back across the border and devouring books and magazines on beer making. By 2000, he was brewing Cosaco, or Cossack, in 18-gallon batches in his yard.

Gonzalez, 39, now has two workers who help mill grains and cook and ferment ingredients in stainless steel kettles in a brewery the size of a two-car garage.

His production is a drop in the bucket compared with that of U.S. microbreweries: just 3,200 gallons a year. And he sells only by the keg, meaning you won't find Cosaco even in specialty shops. He trucks his beer to trendy corners of Mexico City, but struggles against high production costs and a market that is as hard to penetrate as one of the steel kegs.

"We're not competitive," Gonzalez said.

The first Mexican microbrewers started producing more than a decade ago, most of them near the U.S. border. Some newcomers say they have been encouraged to see their sales, though still tiny, climb quickly in the last few years.

Still, as more beer makers have joined in, they have run up against the realities of the Mexican economy, where numerous sectors are ruled top to bottom by one or two huge companies.

Makers of craft beer say only a few hundred Mexican establishments are willing to sell their products. And some say they buy malt abroad because they can't count on Mexican processers, which are controlled by the two beer giants.

The smaller producers are fighting back through a social media campaign to pressure restaurants and bars into opening their refrigerators to independents. Supporters use Twitter, Facebook and a "Free Beer" website to praise places that serve craft beers and ding those that don't.

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