Arca Continental enters the distribution of distillates. The Monterrey company reached an agreement with Diageo Mexico to distribute 16 products from its portfolio, which has among its brands Don Julio, Smirnoff, Johnnie Walker, Captain Morgan and Baileys, in the metropolitan area of Guadalajara, Jalisco.
The Coca-Cola product bottler announced in its financial report that the pilot program for the distribution of Diageo beverages will be deployed during the fourth quarter of this year, without specifying the dates on which these tests will be active.
Alcoholic beverages have proven to be one of the most shock-resistant consumer goods. Diageo, for example, has recovered its sales volume prior to the pandemic, in part thanks to the reopening of points of sale, such as hotels, bars and restaurants, which represent 35% of the distillery’s turnover in Mexico, in addition to that the inertia of household consumption is maintained, with a drive for higher value beverages.
Diageo announced in October 2021 an investment of 500 million dollars to increase tequila production at its La Barca and Atotonilco plants, both in Jalisco, and supply local and external demand. Now it will seek to expand the distribution of the distillate hand in hand with Arca Continental.
Arca Continental entered the category of ready-to-drink alcoholic beverages in Mexico with a hard seltzer under the Topo Chico brand, in addition to selling beer in some markets, such as Brazil.
In the quarter, the company launched reformulations and new flavors of Topo Chico hard seltzer . In addition, it launched new products with Topo Chico tequila seltzer and Topo Chico margarita.
The second Coca-Cola bottler in Latin America also maintains its commitment to the deployment of returnable containers, amid constant increases in raw materials, such as PET and aluminum, since last year.
Until September of this year, the company made investments of 5,929 million pesos to improve execution at its points of sale with refrigerators, returnable containers, in addition to strengthening production and logistics capacities.
Although the rise in raw materials increased the company’s operating expenses by 16%, a greater demand for bottled water and colas allowed Arca Continental to obtain positive results in the third quarter of the year.
“Based on a solid commercial strategy that combines new digital capabilities and a robust price-packaging architecture, we strengthened the profitability of the business in an environment of volatility in the prices of raw materials and disruptions in the supply chain,” said Arturo Gutiérrez, CEO of Ark Continental.
In the period, the company had an increase in sales of 16.2% to 55,723 million pesos compared to the same period of the previous year. Sales volume, which refers to sales per case, closed the quarter up 4.2%.
Net income for this quarter increased 25.1% to close at 4,230 million pesos in its year-over-year comparison, while consolidated EBITDA increased 16.1% to 10,675 million pesos.
The Monterrey company updated its commercial agreement with Coca-Cola for operations in Latin America. “We see the deal as a way to better align its strategy, enabling more efficiencies and better results,” Barclays said in an analysis.
Without sugar, the strongest in Mexico
Arca Continental reported sales in the Mexican market of 24,964 million, an increase of 18.3%, while sales volume increased 5.4% driven by the categories of personal water and colas, driven by the performance of Coca-Cola Sin Azúcar, which continues with a double-digit growth trend driven by the increase in its coverage in the traditional channel.
At the channel level, all showed increases in volume where the traditional channel has grown consistently, the modern channel (supermarkets) and on-premise (restaurants and bars) grew double digits with solid growth in supermarkets due to results in the water category purified and the growth of affordable packaging.
In the United States, net sales closed at 20,485 million pesos, an increase of 14.1%. In South America, sales increased 15.6% to 10,273 million pesos, according to its financial statement information.
