Constellation Brands is to build a new brewery in Mexicali, Mexico, at an estimated cost of US$1.5 billion, as well as expand its Nava brewery with an investment of $250 million.
Constellation expects the new Mexicali brewery, which will have an initial production capacity of 10 million hectolitres, to be completed in four to five years.
The brewery will be situated conveniently close to California, Constellation’s largest beer market, and will have the ability to scale to 20 million hectolitres in the future.
This scalability will require further expenditure on land, water rights and infrastructure, requiring an additional $500 million investment.
The brewery will be fitted out with similar equipment to the company’s Nava facility, to ensure a consistency in brewing and production processes across the board.
Meanwhile, the expansion on the Nava brewery is currently underway, and will increase production capacity from 25 million to 27.5 million hectolitres.
Constellation expects this to be completed in 2018, at a cost of roughly $250 million.
Rob Sands, President and CEO of Constellation Brands, said:
"We are investing in infrastructure that will provide long-term flexibility and capacity needed to support the expected future growth of our high-end Mexican beer portfolio.
"Our Mexican beer business continues to significantly outperform the U.S. beer market and is exceeding our sales volume and depletion expectations, driven by strong consumer demand.
“We anticipate these capacity investments will equip us with the production necessary to continue to be a leader in the high-end segment of the U.S. beer market, which has consistently grown in the mid to high single digit range and is expected to continue to grow at these levels into the foreseeable future.
“We are absolutely committed to satisfying growing consumer demand for our iconic brands, including Corona, Modelo, Pacifico and Victoria, by increasing supply for the U.S. market, and we are pleased to be in a position to continue investing in Mexico and enhancing our operational platform."