EconomyFinancialNew Year's Eve dinners: what will Mexicans toast the...

New Year's Eve dinners: what will Mexicans toast the arrival of 2022 with?

The festivities to celebrate the arrival of 2022 are just around the corner and, with this, comes an opportunity for companies that market alcoholic beverages to have their last push at the end of this year.

Throughout the year, premixed drinks and low-calorie and non-alcoholic beverages, for example, have been positioned among young consumers, however, spirits and local distillates, such as tequila and mezcal, have not stopped be among the preferences of Mexicans.

In 2020, the sale of alcoholic beverages suffered a slump caused by or restrictions on the sale, or prohibition, in various states of the country. Added to this was the closure of restaurants, bars and nightclubs, points of sale for these drinks. But this year, sales are advancing as measures to prevent the spread of COVID-19 have been relaxed.

Rolando Contreras, director of the grocery segment at ISCAM, a firm specialized in market measurement and analysis, comments that in the wholesale channel, sales of alcoholic beverages report a growth of 25.4% compared to 2020 and 13% compared to 2019. These figures are driven by greater mobility, in addition to the fact that this year some massive events were resumed, such as weddings, music festivals and tourist conventions.

Rum, tequila or mezcal?

Since last year and during this 2021, new drinks appeared on the market, including hard seltzers , whose adoption is increasing, especially by younger generations, such as centennials , who are looking for options with less carbohydrates or calories.

During 2020, the category reached a market value of $ 5.6 billion in the world and the consulting firm Grand View Research estimates that it will expand at a compound annual growth rate – which measures the rate of return – of 31.4%, between 2021 and 2028.

In Mexico, Nielsen IQ estimates that in each self-service store there are six different types of hard seltzer and, with the new bets arriving on the shelves, the growth of the category, according to the latest data available, was 139% as of June of this year.

But the rest of the drinks do not give up their space. Data from ISCAM reveal that sales of tequila grew 30%, rum 38%, mezcal 79% and gin 66%, which are relevant percentages and that for Contretas, they are a sign of recovery in this segment, after the setback 2020 for COVID-19.

“We are already above the pre-pandemic levels, we have already recovered the volumes of 2019 and the performance is sure to grow. The only great risk that would stop the market is that we enter a confinement, which seems not to be close, while we continue with activities such as vaccination, ”says Contreras.

For next year, ISCAM projects that growth will slow down because the comparative base is high and will begin to stabilize without the factor that was created by the pandemic and the lockdowns. “There are important factors, such as inflation, that affect purchasing power, and that could be a slowdown factor for alcoholic beverages and all consumer products in the future,” he adds.

Adulterated drinks find a new showcase

The sale of alcoholic beverages had a strong boost in e-commerce channels, which became a point of sale closer to Mexican buyers with the confinement, however, it has also been a showcase for the sale of adulterated beverages.

Clearsele, a company that offers anti-fraud solutions for online stores, found that Don Julio 70 añejo tequila is the drink with the highest fraud attempt, with 26%, followed by Buchanan’s 12-year-old Whiskey with 18%, and Gran Malo tequila with 14 %, Smirnoff tamarind vodka with 12% and Torres 20 brandy with 8%.

Víctor Islas, director of Clearsale Latam, explains that merchants who sell alcoholic beverages in physical stores face a strictly legislated industry, and this has led companies to have an important sales channel in marketplaces , which have become a target for fraudsters.

“Liquor and wine e-commerce companies are considered high-risk merchants, so they must make sure to implement measures to prevent fraud that do not affect the experience of their customers, since at least 39% of online buyers say they do not they would buy from a site again if their purchases are declined ”, he points out.

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