Becle , the company that owns the José Cuervo tequila brand, holds the glass high. The beverage producer has not lost its dynamism, and even with the increases in logistics costs and in the prices of raw materials, it managed to increase its sales and profits during the second quarter of the year.
One of the strategies used by the company, which trades under the ticker symbol Cuervo, is to add premium products to its brands , which, by offering greater product and packaging value, allow it to absorb the impact of rising costs in the production.
This led to the fact that between April and June of this year, the company, which also has Kraken rum and Hangar 1 vodka in its portfolio, generated revenues of 11,334 million pesos, an advance of 18.9%, compared to the same period. of 2021.
In the quarter, Cuervo’s EBITDA grew 43.7% to 2,343 million pesos, while consolidated net income increased 58% to 1,410 million pesos, compared to 893 million pesos in the second quarter of 2021, according to the financial statements of the company.
“Despite continued supply chain constraints across the industry, tequila growth was strong across our family of brands. Although the global environment continues to be volatile, with a difficult macro and inflationary context, we continue to anticipate favorable trends in our portfolio and in our geographic regions as a result of the upturns in the consumption centers, the resilience in the downstream channel and our continued premiumization efforts,” the company said.
By region, the Rest of the World segment (which includes markets outside of Mexico, the United States and Canada) grew the most, with a 68.8% increase in sales . Billing in Mexico grew 64.4% , mainly due to premiumization efforts and price increases for the firm’s brands.
In the United States and Canada , sales were flat year over year; however, it remained the region with the largest share of Becle’s total sales.
By volume of sales (by beverage cases), the market that showed the greatest growth was also the Rest of the World, with an increase of 74.8%. Mexico posted 45% growth, which offset a 7.6% drop in the United States and Canada, impacted by supply chain disruptions and a high base of comparison in Ready to Drink (RTD) beverages.
José Cuervo remains the preferred brand with a 17.8% increase in net sales compared to the same period in 2021, and represented 35.4% of the company’s total net sales in the second quarter.
Net sales of the ‘ Other Tequilas ‘ brands increased 42.0% and represented 33.6% of total net sales. ‘ Other Spirits ‘ brands represented 18.2% of sales and increased 8% compared to the second quarter of last year.
Net sales of ‘ Non-alcoholic beverages and others ‘ represented 3.4% of total net sales and increased 18.6% compared to the same period of the previous year. RTD net sales represented 9.4% of total net sales and decreased 11.6% compared to the same period of the prior year.
Roberto Solano and Brian Rodríguez, Monex analysts, consider that Cuervo presented better results than expected, and highlighted the increase in sales volume, despite the situation and with the operating and exchange conditions of the period.
“The key volume scenario could improve gradually, given a greater reactivation of consumption supported by a social reopening. It should be noted that although there is a change in the consumption of alcoholic beverages, the consumption scenario seems to normalize in the year . It will be good to confirm the consumption trend in the face of a higher inflation rate, but so far the issuer has been resilient,” they said in an analysis.
