Cuervo Posts Strong Start To 2019, With Sales Up By Double DigitsApril 30, 2019
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 MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.