The Brewing Industry Redefines Mexico's Industrial Real Estate Landscape with a Solid Export Muscle

According to government data, beer was the top-selling Mexican agricultural product abroad in 2023, with sales amounting to $6.163 billion, accounting for 12% of Mexico's agricultural and agri-food exports that year. This contributed to economic dynamics, job creation, and foreign exchange inflows to Mexico and continued to drive the development of the industrial real estate market through investments by large companies that see this niche as an opportunity to expand their operations.

In particular, the growth in demand for Mexican beer has spurred the construction of new production plants and the expansion of existing ones, thereby increasing the need for industrial and logistics spaces. This phenomenon has been especially notable in regions such as Bajio and northern Mexico, where significant beer production zones are concentrated. As a result, the industrial real estate sector has experienced a significant boost, with increased investment in infrastructure and a rise in the supply of industrial buildings and distribution centers to meet the growing needs of the agri-food market. Examples include recent investment announcements by Grupo Modelo ($300 million to build a plant in Guanajuato), Heineken (over $480 million to erect a factory in Yucatan), and Constellation Brands ($5.4 billion between 2023-2027 for expansions).

The beer industry in Mexico is so significant that, based on its production, it ranks among the top 19 activities of the manufacturing industries nationally out of a total of 288 activity classes recorded by the National Institute of Statistics, Geography, and Informatics (INEGI). In recent years, the average annual growth in beer production was approximately 7%, with a direct impact on ten industries that contribute 65% of the inputs and services for beer production, from the production of malts, starches, and packaging to the supply of energy, telecommunications, and advertising.

The boom in Mexican beers has not gone unnoticed in the real estate market. According to SiiLA, approximately 8% of the industrial space allocated to food and beverage companies is occupied by breweries. In the last three years, the industrial area of these companies increased by about 10%, exceeding 300,000 square meters in main industrial markets, such as Mexico City, Ciudad Juarez, Mexicali, Monterrey, Queretaro, and Tijuana. However, the most critical beer-producing regions include Zacatecas, Coahuila, Nuevo Leon, and Sonora, which contribute about half of the beer production, according to the latest information from INEGI.

SiiLA's data also indicates that the average brewery company has opted for industrial buildings of 16,000 square meters, most of which (60%) are class B. This suggests that breweries have considerable-sized infrastructures in facilities that, while functional, do not necessarily represent the highest standard in terms of technical specifications or sustainability. However, because they are class B spaces, large companies such as Heineken, Grupo Modelo, and Constellation Brands are investing in constructing new plants with high standards and significant upgrades to their existing facilities to increase their capacity and efficiency.

On the other hand, it is essential to mention that the trend towards decentralizing beer production has led to a geographical diversification of real estate investments. This not only responds to the need for proximity to raw material production regions and consumer markets, but also to mitigate risks associated with the concentration of operations in a single region for logistical, environmental, and regulatory reasons. Moreover, as breweries seek to optimize their supply chain and reduce their carbon footprint, choosing strategic locations becomes even more critical. As a consequence, in recent years, Mexico has witnessed the geographical expansion of the beer industry, which, in addition to having established a productive and logistical corridor in the north (especially in the northeast and northwest regions), Bajio, and the center of the country, is now investing in areas that could expand beer trade, such as in the case of southeastern Mexico, and even the corridor between Oaxaca and Veracruz.

This represents an opportunity for economic growth and the development of new industrial areas, as well as a change in the dynamics of the beer industry, adapted to a globalized world and environmentally conscious. Mexican beer, more than an export product, has become a driver of regional transformation, promoting development and economic diversification throughout the country.

For more information on this and other trends in the commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.