Proximo’s Higher-End Tequilas Boost U.S. Sales
October 24, 2024Higher volumes of upscale Tequilas like 1800, Gran Coramino, and Gran Centenario have boosted Proximo Spirits in the U.S. lately, as parent company Grupo Cuervo posted global third-quarter sales of $553 million. Sales benefited from a weaker Mexican peso during the period, gaining 3.9% on a reported basis but falling 4.3% on an organic basis.
In the U.S. and Canada, Proximo’s sales grew 0.7% on an organic basis, but jumped 12% to $346 million on a reported basis, lifted by foreign exchange benefits. “U.S. and Canada net sales rose 11.7% year-on-year, despite a 2.7% year-on-year volume decrease (to 3.6 million 9-liter cases), reflecting a product mix skewed towards higher sales-per-case brands,” Cuervo said. Tequila growth in the U.S. has centered on the $25-$40 segment lately, where Proximo’s 1800 brand is the leading player.
Both Gran Coramino—the partnership between Proximo and entertainer Kevin Hart—and Gran Centenario Tequilas are up double-digits in U.S. control states through August by volume, while the 2-million-case 1800 eked out a 0.8% increase. Proximo has also seen strong growth from 400 Conejos mezcal. On the flip side, 5-million-case Tequila leader Jose Cuervo dipped 1.5% in control states over the first eight months of the year, and the company has seen continued challenges for its premixed Margaritas.
From a profit perspective, Cuervo’s gross margin registered 53.1% for the third quarter compared to 48.1% in the same period last year. “This 500-basis point increase was primarily due to lower agave-related input costs, reflecting the gradual transition through our older, higher-cost inventory, along with favorable foreign currency effects as a result of the depreciation of the Mexican peso against the U.S. dollar,” the company said. “Additionally, there was premiumization progress across our regions, with a favorable shift in both the product and regional mix.”
Lower agave prices could continue to boost Cuervo’s profits looking ahead. The company’s EBITDA was up 51% on an organic basis to $107 million in the third quarter, representing almost 20% of sales.—Daniel Marsteller
| Proximo Spirits—Key Brands in the U.S. (thousands of 9-liter cases) |
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| Brand | Type | 2023 U.S. Volume1 |
Control States Volume Growth 2024 YTD2 |
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|---|---|---|---|---|---|---|
| Jose Cuervo | Tequila | 5,020 | -1.5% | |||
| Jose Cuervo Margaritas3 | Premixed Cocktail | 2,570 | -15.1% | |||
| 1800 | Tequila | 2,065 | 0.8% | |||
| 1800 Ultimate Margarita | Premixed Cocktail | 1,035 | -16.0% | |||
| Pendleton | Canadian Whisky | 522 | -2.3% | |||
| The Kraken | Imported Rum | 378 | -4.2% | |||
| Proper No. Twelve | Irish Whiskey | 309 | -15.8% | |||
| Gran Centenario | Tequila | 242 | 28.6% | |||
| Bushmills | Irish Whiskey | 185 | -10.7% | |||
| Maestro Dobel | Tequila | 140 | -9.6% | |||
| Gran Coramino | Tequila | 65 | 29.5% | |||
| 400 Conejos | Mezcal | 51 | 56.8% | |||
| Total Key Brands4 | 12,582 | -3.9% | ||||
| 1 Thousands of 9-liter cases. 2 Year-to-date through August 3 Includes Authentic and Golden Source: NABCA & IMPACT DATABANK © 2024 |
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Tagged : 400 Conejos, Gran Centenario, Gran Coramino, Jose Cuervo, Proximo
