February 1/Americas Food and Drink Insights-- Canada's second largest brewer, Molson Coors, has established a joint venture with Mexico's largest brewer, Grupo Modelo, to import, distribute and market Modelo's beer portfolio in Canada. The joint venture named Modelo Molson Imports will represent Modelo's brands in the company's second-most important export market. With a consumer trend towards imported and premium beers throughout many developed markets, including Canada and the U.S., many North American companies are looking to secure their import partnerships for the long term.

Molson Coors has already been importing and marketing Modelo brands in Ontario, Quebec and the Atlantic provinces, and this deal will allow this successful partnership to be rolled out nationwide. Grupo Modelo's portfolio includes Corona Extra, the leading imported beer in Canada and the most successful Mexican beer in the world. Canada has been at the forefront of the trend toward premium and imported beers, a trend which has left brewers of economy beers such as Ontario-based Brick Brewing struggling to find a market. This trend has allowed brewers to continue to grow profits through higher-margin products despite the beer market being mature and volume sales not having increased significantly over the last few years. BMI expects this trend to continue and forecasts the Canadian beer market to continue to grow in value terms by around 4.6% annually over the next few years.

Grupo Modelo is half owned by American brewing giant Anheuser-Busch, the owner of Canada's biggest selling beer brand, Budweiser, brewed under license by Labatt a division of Ambev. Anheuser-Busch has therefore secured a reasonably strong position in Canada despite not operating directly in the country. This strategy has proved reasonably successful up until now; however, an argument could be made that Anheuser-Busch's current difficulties stem from its lack of a genuine international focus, a symptom of which is its lack of a real operating presence in a market just a border crossing away from its U.S. home market. Whilst other companies have concentrated on expanding into emerging markets Anheuser-Busch has seemed fairly content with sitting on its U.S. revenues and licensing out its brands to other brewers -- a strategy which has proved unpopular with investors and left the company struggling to grow revenues in recent years.

From the January 7, 2008, Prepared Foods e-Flash