Mexico City — Constellation Brands, which produces the beer of Mexico’s Grupo Modelo for the US market, will test in mid-2024 how it will ship the beverage it will produce at the new plant it is building in Veracruz to the neighboring country.
The tests will be carried out by road, overland rail transport, in containers on ships and the railroad-ship that connects Coatzacoalcos, in southern Veracruz state, with Mobile, Alabama, a project developed by Grupo México and CG Railway, said the company’s top executive for Mexico during a media event.
“Our logistics costs are very important, Veracruz opens up the possibility of two new transport methods, and serving the entire eastern part of the United States,” said Constellation Brands Mexico president Daniel Baima.
The Veracruz brewery is the alternative decided by Constellation Brands after the government of President Andrés Manuel López Obrador vetoed its plants to build a plant in the northern border city of Mexicali, from where the company sought to serve the western US market.
The plant, which implies an an investment of $1.4 billion, is being built on land near the port of Veracruz, which is around 1,000 kms (621 miles) from the Texas border. The failed project in Mexicali was located just 15 kms (9.3 miles) from the border crossing with Calexico, California.
Constellation Brands currently produces beer at its facilities in Nava, in Coahuila state, and in Ciudad Obregón, in Sonora state, which are approximately 46 and 500 kms from the US border, respectively.
The company announced in its most recent financial report that during fiscal year 2023, which ended in March, it recorded a 12% increase in freight costs, but which represent less than 25% of its import costs.
