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7 Oct 2015

The era of strategic consolidation

Between 1970 and 1990, FEMSA formed its Business Units, diversifying its product portfolio in general. Without a doubt, these were 20 very important years for the definition of what FEMSA is today, and for the company’s strengthening and projection. Between 1970 and 1990, some crucial events took place influencing the consolidation of what we now know as FEMSA. These years represent a milestone for the company, which stopped being 100% focused on manufacturing and selling the brands of Cuauhtémoc brewery, diversifying its operation to beverages, packaging, and stores. On September 1973, after Don Eugenio Garza Sada passed away, VISA experienced a restructuring stage. The company separated its iron and steel as well as some packaging operations forming the independent Grupo Industrial ALFA, S.A. in 1974. Meanwhile, VISA continued managing the brewery, the rest of the packaging operations, and the financial and banking services. When faced with this situation, the company ventured into two new businesses, which have proved highly successful, it opened the first OXXO stores and acquired its first Coca-Cola franchise in Mexico. OXXO was born in the city of Monterrey in 1978, looking to sell VISA’s products in small-format stores, offering wide store hours and strategic locations. The success of the concept was such that by 1990, OXXO had over 400 stores strategically distributed in 15 cities throughout Mexico. This growth continues. In regards to Coca-Cola products bottling operations, VISA acquired the first organization of this type in 1979, which operated five factories located in Mexico City and Southeastern Mexico. The success of this transaction was clear from the start, and it continued throughout the 1980s, consolidating the Business Unit later called Coca-Cola FEMSA. Cervecería Cuauhtémoc merged in 1985 with Cervecería Moctezuma, resulting in the largest beer manufacturer in the country: Cervecería Cuauhtémoc Moctezuma. In addition to providing a greater projection to the brand in the territories where it was not yet present, this merger added brands such as XX, XX Lager, Sol, Noche Buena, and Superior to the product portfolio. Between 1970 and 1990, OXXO was born, the merger of Cervecería Cuauhtémoc with Cervecería Moctezuma took place, and the company acquired the first Coca-Cola bottling operation.