Exclusive news and research on the wine, spirits and beer business

Grupo Cuervo Posts Sales And Volume Rises In The U.S. Market As Operating Profit Dips

October 26, 2018

Grupo Cuervo’s volumes in the U.S. and Canada rose by 4.6% to 2.8 million cases in its third quarter ended September 30, 2018, the company reported today. Sales in those two key markets jumped 8.9% to nearly MXN$4 billion ($203m), compared to the year-earlier period, while operating profit dipped 24.4% to MXN$836 million ($44.3m). The company attributed the sales increase to an ongoing consumer shift to premium products and 100% blue agave Tequilas.

Grupo Cuervo’s gross profit increased 2.1% in Q3 to MXN$3.34 billion ($172m), though gross margin fell to 52.5% (from 57.1%) because of lower production efficiencies. The company explained that higher demand for 100% agave Tequila has Tequila producers using younger agave plants whose yields are less efficient than those of mature plants.

Global sales of Cuervo’s namesake brand dipped 3% to MXN$2 billion ($103m) while volume grew 1.7% to 1.6 million cases. Jose Cuervo has been performing better in the U.S. market, however, rising by 4% to 439,000 cases in IRI channels in the 36 weeks through September 9. Globally, Grupo Cuervo’s other Tequilas continued to grow, showing an aggregate 10.4% volume increase to 814,000 cases and a 13.4% rise in sales to MXN$1.5 billion ($77m).

Other spirits brands in the portfolio saw their total sales grow by 28.4% to nearly MXN$1.5 billion ($77m) in sales and 13.8% by volume to 956,000 cases. In the U.S. market, the company’s strongest growth brand in both NABCA and IRI channels is Canadian whisky brand Pendleton, which was up 7% to 67,000 cases in control states and up 9% in IRI channels to 28,000 cases.—Shane English

Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.

Tagged : , ,

Get your first look at 2020 data and 2021 projections for the wine and spirits industries. Order your 2021 Impact Databank Reports. Click here.

Previous :  Next :