Southern success

Mexican drinks were hugely popular about 15 years ago. Then they weren't. But they've made an impressive comeback, as Adam Withrington explains.

If you were looking for interesting stories in the world of premium packaged lagers (PPL) you wouldn't have to look much further than Mexico.

Lately in the land of the pound, the roast potato and the bowler hat there has been a pining for beers from the land of the peso, the fajita and the sombrero.

Sol has experienced year-on-year growth in the UK for the last five years, while Corona Extra has not only become the world's fourth biggest selling beer but was the PPL market's biggest mover as it broke into The Publican Brands Report's top 100 listing for the first time.

Indeed, on a visit to Mexico last month I found out quite how successful Corona has become. The brand sells approximately two million cases a year in the UK. In 2003 sales of Corona Extra here grew by 110 per cent compared to the previous year and according to AC Nielsen statistics, the brand has burst into the top 10 of UK PPL brands.

But it wasn't always like this - sandwiched between their late 1980s heyday and today's success there was a period when holding a Mexican beer in your hand was about as fashionable as rolling up the sleeves of your jacket.

By their very nature, successful marketing gimmicks fade as quickly as they arrive. Mexican beer was no exception - thanks to a wedge of lime.

Many attribute the idea of putting a wedge of lime in your bottle of Mexican lager to marketing guru Harry Drnec, now responsible for the massive success of energy drink Red Bull. At the time he was running operations at Sol lager and the lime wedge in the bottle neck was at the core of the brand's identity.

Clive Bygrave, now on-trade sales director at Pouring Brands, worked in sales for Sol in the early 1990s. "It was all about selling the product with the slice of lime in it at that time," he says, "but it was popular. Consumers liked the element of theatre about it."

Angel Garcia-Gomez, the UK head of Corona, Sol's main rival, claims Corona was the first to push the idea. "The company put it in a clear, long-necked bottle. It looked very attractive and consumers really went for it," he says.

Regardless of who did come up with the idea, the period between 1988 and 1992 was boom time for the category.

However, by 1994 it had died a death and according to Angel, the lime was responsible. "When lime went out of fashion it affected the whole Mexican beer category. The UK was the only place where lime became a problem.

"The lime wedge was just promoted too much. Mexican lager became all about the lime rather than the quality of the beer, which should have been the focus," he argues.

Zoe Smith, the current brand manager at Sol, admits that the hard sell of the lime did not help matters. "I think it became a bit of a parody of itself at some point. But the fact remains that the lime really did add to the flavour of the beer," she points out.

Nevertheless, the mid-90s was not a good time to be trying to flog Mexican beer onto the UK market. Angel explains: "It was hard when I took over at Corona in 1996. The previous year we had only sold approximately 300,000 cases of Corona Extra. Everyone was saying that Mexican beers were not fashionable and it was difficult to get anyone in pubs and bars to listen to us."

So why has the category made such a massive comeback? Zoe from Sol believes there are a number of reasons. "The increase in foreign travel, particularly to Mexico, has meant that more people are experiencing the brands first hand," she explains.

"Also I think we were helped by the rise in Latino culture a few years ago - the growth in popularity of salsa dancing and pop stars like Ricky Martin. People have been converting from premium packaged spirits to PPLs - it is now cool again to be seen with a Mexican beer in your hand."

Angel believes Corona's success is down to a change of strategy. "We now market Corona as a premium lager, not a Mexican lager. We are proud of its heritage but believe it should stand alone as a premium brand. It is a unisex product which is bucking the trend in an otherwise static bottled lager market," he says.

This move towards targeting Corona as a premium product could become even more pronounced over the next few years.

According to Angel, Corona's brewer - Grupo Modelo - has a range of other premium beers which are performing well in the UK market, despite a complete lack of promotion. Modelo Especial is performing well in the style bar market, while Negra Modelo and Pacifico lager are also making inroads.

Salitos​

So what is the way forward for the Mexican category? Well either you can go premium, like Corona, or try to innovate.

Clive Bygrave, whose CV shows stints at Maison Caurette for Sol and Budweiser Budvar, is now on-trade sales director at sales and marketing company Pouring Brands. One of its flagship brands is a lager with a difference.

Salitos tequila beer, says Clive, is "like Sol with attitude", as well it might be, with a shot of tequila and the taste of South American limes in each bottle as well as an ABV of 5.9 per cent.

But he is not looking to compete against Mexican lagers. "This is a Mexican-style lager but we're aiming it at the RTD market. There is a lot more room for innovation and we think it will give the consumer better value. When we trialled it we found that there was a good male/female split."

Salitos was launched by UK distributor BB Supply Centre, its previous owner, 18 months ago, and its influence has spread to the top brands. Last month Sol revealed that it has teamed up with Bacardi Limon to trial a new concept called "Bandito", where a shot of lemon flavoured rum is offered with a bottle of Sol.