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Proximo Spirits Q2 sales drop 2.4%
The company behind Jose Cuervo Tequila saw net sales drop by 2.4% in the second quarter of 2023, after volume declines in the US and Canada.
Mexico City-headquartered Proximo Spirits’ net sales reached MXN 11.07 billion pesos (US$662 million) for the three months ending 30 June 2023. The group’s gross profit declined by 5.3% to MXN 5.6bn pesos (US$334.8m).
Net sales for the rest-of-the-world region increased by 7.9%. The group’s home market, Mexico, reported a 17.7% rise, following ‘premiumisation efforts’ and price increases.
The US and Canada represents 53.8% of sales for the group in the quarter, while Mexico makes up 27.7% and the rest-of-the-world region has a 18.5% share.
The group struggled in its biggest market, the US and Canada, where sales fell by 12.9% after being affected by volume decreases and foreign currency changes.
Net sales of the group’s flagship brand, Jose Cuervo, rose by 1.6% for the second quarter.
The company’s ‘other Tequilas’, which includes the 1800 brand, increased by 0.8%.
On the other hand, the group’s ‘other spirits’ portfolio declined by 4.8%. Proximo Spirits is also the owner of Kraken rum and Bushmills Irish whiskey, among other brands.
The ready-to-drink portfolio also decreased, falling by nearly a quarter (23.6%).
The group said in a statement that it had been affected by increased input costs and ‘region mix headwinds’.
“The prevailing theme throughout this year has been the pressure on profitability, primarily driven by exchange rate appreciation, input cost inflation and region mix headwinds,” the company said.
“Despite these difficulties, we are proud to report that our premiumisation strategy has provided some relief, as we have seen robust growth in our premium Tequila and whiskey segments, outperforming the overall industry.
“As we enter the second half of the year, we are encouraged by the momentum we have built thus far. While we acknowledge the ongoing challenges, we remain confident in our ability to navigate these headwinds effectively by monitoring market conditions and closely following consumer trends.”
Jose Cuervo is the biggest-selling Tequila in the world – the brand sold 9.2m nine-litre cases in 2022, up from 7.9m in 2021.
Last week, Brand Finance named 1800 Tequila as the world’s fastest-growing spirit after it more than doubled in value last year.