Introduction
Gerardo Cruz, the Finance Director of Coca-Cola FEMSA, has stated that 2026 will be a “challenging year” for volume performance in Mexico as consumers grapple with the impact of increased IEPS on soft drinks.
Coca-Cola FEMSA’s Strategies
To offset the anticipated decline in sales due to the upcoming rise in the special excise tax on beverages with added sugars and sweeteners, Coca-Cola FEMSA is leveraging two key initiatives: the World Cup 2026 and their Zero line.
World Cup 2026 as a Marketing Opportunity
Jorge Collazo, Director of Investor Relations at Coca-Cola FEMSA, reported a 5% relative volume increase during previous World Cup editions. Although not a substantial volume, this growth is significant in terms of brand value, especially considering the upcoming IEPS increase in Mexico.
Coca-Cola has always been a memorable brand during the World Cup. We will capitalize on this asset.
— Jorge Collazo, Director of Investor Relations, Coca-Cola FEMSA
During a recent analyst call, Cruz emphasized that the FIFA World Cup 2026 will serve as a major platform to promote Coca-Cola Zero, their zero-sugar variant.
FIFA World Cup 2026 will take place from June 11 to July 19, 2026, in the United States, Canada, and Mexico.
Coca-Cola Zero’s Growth Potential
The Coca-Cola Zero segment grew by double digits in the third quarter, accounting for only 4% of Coca-Cola FEMSA’s total sales in Mexico. Cruz considers it a “silver bullet” to mitigate the effects of the new IEPS.
IEPS Increase and its Impact
The special excise tax on flavored beverages will rise from 1.6 pesos per liter to 3.08 pesos per liter for sugary drinks, and 1.50 pesos per liter for those with any added sweeteners.
Cruz anticipates a single-digit volume decrease in Mexico due to the IEPS increase, alongside an expected 1.5% economic growth.
Key Questions and Answers
- What is the special excise tax (IEPS) and why is it relevant?
The IEPS is a tax on specific goods, including flavored beverages with added sugars and sweeteners. The upcoming increase in IEPS will impact Coca-Cola FEMSA’s sales and volume performance, prompting the company to seek alternative growth strategies.
- How will the World Cup 2026 help Coca-Cola FEMSA?
The FIFA World Cup 2026 will serve as a significant marketing opportunity for Coca-Cola FEMSA to promote their zero-sugar variant, Coca-Cola Zero, thereby offsetting the anticipated sales decline due to the IEPS increase.
- What is the current market share of Coca-Cola Zero in Mexico?
Coca-Cola Zero accounts for only 4% of Coca-Cola FEMSA’s total sales in Mexico, leaving ample room for growth.
