Cuervo’s U.S. Volumes Slip In Second Quarter
July 28, 2023Grupo Cuervo saw price increases impact its North American volumes in the second quarter, as the company cited “pressure on profitability, primarily driven by exchange rate appreciation, input cost inflation, and region mix headwinds.” Overall, Cuervo’s global sales for the three months through June grew 7% organically at constant currency to $665 million, while EBITDA fell 18% to $115 million.
North American sales for Proximo Spirits were down 5.6% to 3.9 million 9-liter cases for the three-month period, with sales slipping 1.4% to $360 million at constant currency. On a reported basis the sales decline was steeper at 13%, reflecting the stronger Mexican peso against the U.S. dollar. Still, Cuervo noted that, “Our premiumization strategy has provided some relief, as we have seen robust growth in our premium Tequila and whiskey segments, outperforming the overall industry.”
While currency issues have hampered profitability in recent months, Cuervo flagged that the currency effect was “partially offset by price increases across regions, better product mix, and a decrease in the agave market price,” the latter of which could ease costs moving forward. “While we acknowledge the ongoing challenges, we remain confident in our ability to navigate these headwinds effectively by monitoring market conditions and closely following consumer trends,” the company added.—Daniel Marsteller
| Proximo Spirits—Key Brands (thousands of 9-liter case depletions) |
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| Brand | Origin/Type | 2021 | 2022 | Percent Change1 |
|---|---|---|---|---|
| Jose Cuervo | Tequila | 4,820 | 5,085 | 5.5% |
| Jose Cuervo Margaritas2 | Pre-Mixed Cocktail | 3,030 | 2,750 | -9.0% |
| 1800 | Tequila | 1,800 | 2,025 | 12.5% |
| 1800 Ultimate Margarita | Pre-Mixed Cocktail | 1,245 | 1,190 | -4.5% |
| Pendleton | Canadian Whisky | 450 | 499 | 11.0% |
| The Kraken | Imported Rum | 390 | 380 | -2.5% |
| Proper No. Twelve | Irish Whiskey | 280 | 276 | -1.5% |
| Gran Centenario | Tequila | 184 | 230 | 25.2% |
| Bushmills | Irish Whiskey | 195 | 195 | 0.0% |
| Maestro Dobel | Tequila | 107 | 135 | 26.3% |
| Total Key Proximo Brands | 12,491 | 12,765 | 2.2% | |
| 1 Based on unrounded data. 2 Includes Authentic and Golden. Source: IMPACT DATABANK © 2023 |
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Tagged : 1800, Grupo Cuervo, Jose Cuervo, Proximo
