Arca Continental, the second Coca-Cola bottler in Latin America, invested 3,470 million pesos during the second half of 2022 for the acquisition of coolers and returnable containers, amid the rise of PET, a key raw material for the manufacture of containers of the drinks.
“In the second half of 2022, we will continue to deploy innovative strategies in the market to meet the needs of customers and consumers in a macroeconomic environment of high inflation and disruptions in the supply chain,” said Arturo Gutiérrez, CEO of Arca Continental in a press release. call with investors after his quarterly results report.
Sales volume maintained a positive trend in the second quarter, increasing 6.8%, excluding bulk water sales, driven by increases of 8.3% and 6.7% in the water and soft drinks categories, respectively.
The cost of sales, however, increased 18.9%, mainly due to the increase in the prices of raw materials, such as PET, while administrative and selling expenses increased 13.4% to 15,696 million.
Although Arca recognizes that it is now more expensive to produce and sell its products, the rise in prices has allowed it to keep its income safe. Between January and June, the company reported revenue of 99,428 million, 15.2% more compared to the first half of 2021.
Only in the second quarter of the year, sales amounted to 53,363 million pesos, an increase of 16.5%, compared to 45,808 million in the same period of 2021. The company explained that the result is due to the good performance in the markets of Mexico and USA.
The EBITDA of the bottler increased 11% to 10,436 million pesos in the period, from 9,399 million, a figure that represents a margin of 19.6%. This one, however, fell 90 basis points. Net income for the quarter was 4,222 million, 34.9% more compared to 4,222 million in the second quarter of 2021.
Since the beginning of the year, the company has promoted a strategy to diversify its versions and sizes of packaging, which generated good results in the second quarter of the year. The category of ‘personal packaging’ showed an increase of 1.1 percentage points in the quarter, as a result of a good performance of launches made in the quarter in the category of soft drinks, with a 250-milliliter non-returnable packaging and a universal bottle in packaging. of 500 milliliters.
The universal bottle continues to be a growth driver as it continues to roll out in more territories. The universal bottle now represents 9% of the sales volume mix within the returnable portfolio, which means an increase of 5 percentage points compared to the previous year.
Its snack division, Bokados, had double-digit growth in sales and EBITDA, as a result of segmented price adjustments and a focus on increasing coverage in the traditional channel. The modern channel (supermarkets) shows the highest growth in sales as a result of better promotional strategies.
The company has also sought to attract new customers by launching exclusive promotions, boosting brand performance with combo presentations, promotional items and tasting initiatives, as well as continuing its digital strategy.
“In the year, the operation has focused on improving advanced analytics capabilities, specifically to optimize promotions. Approximately 6% of promotional spending has been shifted towards more efficient discounts,” the company said.
In the country, AC Digital in Mexico reached more than 50% of the clients of the traditional channel (stores) registered on the platform, representing around 19% of the total volume of the operation.
Arca also launched the pilot of the “Portfolio by Client” initiative, which is an evolution of the Unforgivable strategy, and aims to obtain a monthly personalized portfolio according to the needs of each client. The results were a growth of 2.2% in sales and 6.3% in market share.
United States and South America
In the United States, sales grew 13.7% to 19,942 million pesos, driven by the price/packaging strategy. The bottler launched a brand of fresh water with different flavors in 16-ounce presentations. The results of this launch have been positive, achieving coverage in supermarkets and convenience stores of 50.8% and 37.3%, respectively.
In the South America region, Arca increased its net sales by 26.7% to 9,562 million in the second quarter, driven by volume growth in all operations and the pricing strategy mainly in Argentina and Peru.
