No menu items!
76 F
San Jose
Wednesday, June 19, 2024

Beer Goliath FIFCO Cedes No Ground

If you’ve pulled up a stool at a bar or looked over a drink menu at a restaurant in Costa Rica, you’ve probably noticed that while there are more than 35 different types of beer available in the country, five brands dominate the Costa Rican market: Imperial, Pilsen, Bavaria, Rock Ice and Heineken.

The reason for the prominence of these five beers is that they all are produced domestically by Florida Ice & Farm Co. (FIFCO), the brewing giant that has controlled the country’s flow of beer for 100 years. In that time, FIFCO has become the country’s largest publicly-traded company and, according to the Inter-American Development Bank, it is the most valuable private company in Costa Rica.

“We were founded in 1908, and in 1912 we began to produce our first beer, which was Pilsen,” said Erick Alfaro, supervisor of production at the FIFCO production plant and brewery in Heredia, northwest of San José. “We currently produce 14 types of beer, as well as other alcoholic drinks, Tropical fruit drinks, Cristal water, Pepsi, and even some spices and food complements.”

So, to say that FIFCO is the dominant source of alcoholic and non-alcoholic beverages in Costa Rica would be a considerable understatement. The company reports that it produces around 40 million gallons of beer per year. The second largest producer of domestic beer in Costa Rica is a microbrewery, K&S Cervecería, in Cartago, which produces an average of 1,000 liters per month, or around 3,000 gallons per year.

Brewing, the Secret to FIFCO Success Brewing beer is an intricate science. For a plant that produces around 40 million gallons of popular beer with worldwide distribution, the preparation of the product is an exact science. The process involves thousands of employees in a variety of roles – from the person who adjusts the temperature of a several-thousand-gallon tank of Imperial, to the person who loads the crates of bottled beer onto a truck headed for Puntarenas. At FIFCO, mixing of the ingredients to create the beer, to the bottling and distribution, is a continuous process accomplished with pride and precision.

“Many of our employees have been here for 15 to 20 years,” Alfaro said. “A lot of them have family members who have worked here before them and they have been around FIFCO for as many as 30 years. With people like that working here, there is a lot of pride that goes into making sure the process is done correctly.”

The process begins in the towering white tanks that flank the far side of the plant grounds. There, the ingredients, which come from Costa Rican farmers and producers, are brewed with the appropriate mix of water, sugar and other necessary ingredients, such as rice, corn, malt, barley, hops, sorghum and wheat. The ingredients are altered in the process in order to create a unique flavor for a particular brand.

From there, the beer is transferred to mammoth, aluminum tanks for fermentation at precise temperatures. Throughout the process, brewing production supervisor Luis Fernández sits in a third-story office that oversees the peaks of the tanks. From there, Fernández adjusts the settings for each individual beer.

“The temperature of the tanks determines the amount of alcohol content,” Fernández said. “A light beer has a lower alcohol content, so it is brewed at a lower temperature. Beers with higher alcohol contents are brewed at higher temperatures.

We adjust the temperatures of the tanks to assure the beers are brewed with the correct alcohol content.”

After the beer has fermented for the appropriate amount of time, it is routed to the bottling plant. This plant intertwines every step in the beer bottle cycle – from a bottle’s entry into the plant via a recycling system, to its cleaning, to the proper indentation on the bottle, to the labeling, to the appropriate beer being put in the bottle, to the capping and, finally, to its exit in a large crate with 19 other identical bottles. The continuous process is monitored by several employees stationed at various spots along the way.

“Each step in the process is aimed at distributing a fresh, quality beer to the Costa Rican market,” said Gisela Sánchez, director of corporate relations at FIFCO. “Our employees are committed to an excellent product every step of the way.”

Imperial, which is the most popular beer in Costa Rica, leaves the plant in Heredia and is exported to the United States, Australia and China. The Dutch beer Heineken is produced under license for the Central American market at FIFCO.

Can Other Beers Compete?

Although FIFCO produces the primary brands offered in Costa Rica, many different ones are available at bars, restaurants and grocery stores.

Grupo Pampa, based in Pavas, west of San José, is the local distributor for wine and Mexican beers. Distribuidora Isleña, based in Heredia, northwest of San José, distributes Belgian beers, and K&S Cervecería produces four microbrews that are sold in certain locations in the Central Valley and in the central Pacific beach towns of Jacó and Manuel Antonio. Though these less prominent beers do sell, none come close to being serious competition for the FIFCO-produced labels.

“FIFCO is absolutely dominant in the market,” said Pablo Carnevale, vice president of Grupo Pampa. “I think that the potential for other brands to compete does exist and, over time, other brands could be developed in Costa Rica. There are some niches in the market where other beers can enter. It’s difficult, but possible.”

Although the beer market is open to competition, the FIFCO market share is so lopsided and distribution throughout the country so comprehensive that there is not much room for other distributors to capture much revenue or garner significant attraction to their brands. Still, the market is open and Coors Light is the first U.S.-based beer to attempt to break into the Tico market. Coors Light began distribution in Costa Rica in September.

“The local beer producers are very smart people,” said Paul Mendieta, Molson Coors managing director for Mexico, the Caribbean and Central America. “Not only do they have a nice portfolio of brands, but they also have licensing deals with some of the (international) brands like Corona and Smirnoff Ice. But that’s something we saw when deciding to enter the market. If there is that nice set portfolio of brands, it means that there is an opportunity for other brands besides those that have traditionally been available for many years in Costa Rica.

“Our goal is to attain as much distribution as we can, but this is not a 100-meter race; this is a marathon. We are there for the long-term. The local brewer obviously has great brands and great products, but we believe there is a place for Coors Light in Costa Rica as well.”

The entrance of new beer brands into the Costa Rican market is familiar territory for FIFCO, which has seen many competitors come and go over the course of its 100-year reign. The promoters of Coors Light, however, hope that it can be the brand with the clout to shake the foundations of the FIFCO empire.

According to Mendieta, Coors Light has shown 15 consecutive quarters of growth in the U.S. market, owns 42 to 45 percent of the market share in Puerto Rico and, in the two years since entering the beer market in Panama, has captured 1 percent of market share without committing significant resources to the brand, and while competing against two major breweries.

But while Coors Light and other brands claw to obtain small slices of the Costa Rican beer market, FIFCO will doubtless keep chugging along.



Latest Articles

Popular Reads