The Mexican government recently freed the Mexican soft drink market from nearly 40 years of price controls in return for a commitment from bottling companies to invest nearly $4.5 billion and create nearly 55,000 jobs over the next 7 years.
Naturally, Mexico has become another battleground in the international cola wars. In Mexico, Coca-Cola and Pepsi command 50% and 21% of the market respectively. The cola war is especially hot here because the per capita consumption of Coca-Cola and Pepsi exceeds that of the United States.
The face off in Mexico is between Gemex, the largest Pepsi bottler outside the United States, and Femsa, the beer and soft drink company that owns the largest Coca-Cola franchise in the world.
Femsa, however, may be at a disadvantage. Despite being part of the conglomerate Grupo Vista, Femsa lacks financial punch because it plays only a small part in the conglomerate's overall interests.
The challenge in Mexico is to win market share through distribution efficiency. With this in mind, each company is undertaking strategic efforts designed to bolster their shares of the Mexican market.
Pepsi is moving in on the Coke-dominated Yucatan peninsula while Femsa, the Coca-Cola franchisee, is planning to invest $600 million more for 3 new Coca-Cola plants next door to Gemex's Mexico City facilities.
The parent companies have joined the battles as well. Coca-Cola has made a $3 billion long-term commitment to the Mexican market, and Pepsi has countered with a $750 million investment of its own.
Naturally, Mexico has become another battleground in the international cola wars. In Mexico, Coca-Cola and Pepsi command 50% and 21% of the market respectively. The cola war is especially hot here because the per capita consumption of Coca-Cola and Pepsi exceeds that of the United States.
The face off in Mexico is between Gemex, the largest Pepsi bottler outside the United States, and Femsa, the beer and soft drink company that owns the largest Coca-Cola franchise in the world.
Femsa, however, may be at a disadvantage. Despite being part of the conglomerate Grupo Vista, Femsa lacks financial punch because it plays only a small part in the conglomerate's overall interests.
The challenge in Mexico is to win market share through distribution efficiency. With this in mind, each company is undertaking strategic efforts designed to bolster their shares of the Mexican market.
Pepsi is moving in on the Coke-dominated Yucatan peninsula while Femsa, the Coca-Cola franchisee, is planning to invest $600 million more for 3 new Coca-Cola plants next door to Gemex's Mexico City facilities.
The parent companies have joined the battles as well. Coca-Cola has made a $3 billion long-term commitment to the Mexican market, and Pepsi has countered with a $750 million investment of its own.