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Supply Chain Issues Slow Cuervo’s U.S. Sales In The Third Quarter

October 29, 2021

Grupo Cuervo posted sales down 7.9% to approximately $470 million in its fiscal third quarter ended in September, reflecting supply chain challenges and tough year-over-year comps in the U.S. and Canada.Volume dipped 2% to 6.5 million 9-liter cases, while EBITDA fell 35% to $103 million. For the first nine months of the year, sales remain up by 8% to $1.29 billion, although operating income is down 12.6% to $246 million.

Company volume in the U.S. and Canada was down 18.6% for the quarter to 3.5 million cases, but remains 23% above its Q3 2019 level. Similarly, North America sales were down 24.6% to about $277 million, but are up 35% versus 2019. Cuervo cited “supply chain related issues, the difficult comparison base with Covid-19 pandemic-driven results in the third quarter of 2020, and the appreciation of the Mexican peso” as holding down its U.S. sales in the period. While North America saw challenges, Cuervo’s other global regions were up double-digits.

The third-quarter declines were centered in Cuervo’s flagship Tequila brand and RTDs, whose global volume decreased 8.7% and 29% for the quarter, while other Tequilas, spirits, and non-alcoholic brands saw solid ongoing growth. A 41% increase in distribution expenses—blamed on heightened freight, warehousing and logistics costs—also weighed on the company in the third quarter.—Daniel Marsteller

Proximo Spirits—Key Spirits Brands
Brand Origin/Type Total 2020
Depletions1
2021 YTD
Percent Change
In Control States2
Jose Cuervo Tequila 4,703 4.1%
Jose Cuervo Margaritas3 Pre-mixed Cocktail 3,338 2.1%
1800 Tequila 1,531 18.9%
Three Olives Vodka 875 -6.4%
1800 Ultimate Margaritas Pre-mixed Cocktail 627 17.5%
The Kraken Rum 491 *
Pendleton Canadian Whisky 397 12.5%
Proper No. Twelve Irish Whiskey 232 33.0%
Bushmills Irish Whiskey 201 1.3%
Gran Centenario Tequila 141 44.4%
Tin Cup American Whiskey 90 6.8%
Total Key Brands4 12,625 7.2%
Other Brands 625 9.6%
Total Proximo Spirits 13,250 7.3%
* Less than 0.05%
1 Thousands of 9-liter cases.

2 Year-to-date through September.
3 Includes Authentic and Golden.
4 Addition of columns may not agree due to rounding.

Source: NABCA and IMPACT DATABANK © 2021
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