Cuervo Posts Strong Start To 2019, With Sales Up By Double Digits

Grupo Cuervo has rocketed out of the gate in 2019, with first quarter sales rising 22.5% to MX$5.28 billion ($278m) and EBITDA up 6.8% to MX$1.15 billion ($60.4m). Global shipment volume leapt 13.1% to 3.9 million 9-liter cases, led by the Jose Cuervo brand, which was up 8% to 1.1 million cases.

Cuervo noted that depletion trends accelerated in its U.S. and Canada business in the first quarter, with sales up 31% to MX$3.38 billion ($178m) on a volume increase of 21% to 2.17 million cases. The company attributed the strong showing to a combination of volume growth and favorable sales mix toward premium brands.

According to Impact Databank, Jose Cuervo rose 2.5% to 3.6 million cases in the U.S. last year, while 1800 Tequila grew by 10.5% to 1 million cases. The 100%-agave Jose Cuervo Tradicional has also been a dynamic performer, up 26% to 190,000 cases last year, along with Pendleton whisky, which rose 11.5% to 310,000 cases. Both Tradicional and Pendleton recently earned Impact “Hot Brand” honors. The company has also seen a fast start for Proper No. Twelve Irish whiskey, on which it’s partnered with Conor McGregor’s Eire Born Spirits.

Amid the solid first-quarter results, Cuervo noted that it continues to face headwinds in the form of rising agave prices. It saw a decline in gross margin during the quarter, blamed on “increases in third-party agave supply costs and lower production efficiencies; these effects were due to higher demand of super-premium Tequila along with the industry-wide sourcing of younger agave plants, affecting our distilling efficiency.”

In January, Cuervo named Brown-Forman veteran Michael Keyes as president and CEO of its Proximo Spirits subsidiary. Keyes served as Brown-Forman’s North America president for more than a decade. He replaced Mark Teasdale, who departed last summer to join craft player Biggar and Leith.—Daniel Marsteller

Tagged : Grupo Cuervo, Jose Cuervo, Pendleton, Proper No. Twelve

GET YOUR FIRST LOOK AT 2021 DATA AND 2022 PROJECTIONS FOR THE WINE AND SPIRITS INDUSTRIES. ORDER YOUR 2022 IMPACT DATABANK REPORTS. CLICK HERE.