MEXICO CITY (Reuters) -Mexican distiller Becle, parent company of the popular Jose Cuervo tequila brand, on Friday forecast further sales growth in 2023 as it expects to increase the volume of spirits sold across North America.
In a conference call following its fourth-quarter results, Becle executives said they expected total sales to grow by “high single digits to low teens” this year, while volumes in the United States and Canada should grow by a “mid single-digit”.
Becle in the fourth quarter posted just under 2% volume growth in the United States and Canada, driving sales there up around 4% – in lines with estimates from Barclays.
Barclays analysts said that while Becle’s overall quarterly sales slightly missed their expectations, its profits performed better than hoped for thanks to stable prices for agave – a plant used to make tequila – as well as price hikes and a “better sales mix.”
Becle however posted a 12% decline in its quarterly net profit after a strong 2021, hurt by higher borrowing costs. Its shares were down nearly 3% in early trading.
“Our long-held belief in tequila as a top premium spirit is proving correct,” Becle said Thursday, citing estimates from drinks market analysts IWSR.
“Tequila recently overtook American whiskey to become the second most valuable spirit in the U.S. and is set to surpass vodka by the end of 2023.”
Becle, based in Mexico City, sells Jose Cuervo family tequilas as well as Creyente and 400 Conejos mezcal, Stranahan’s whiskey, Three Olives vodka, Boodles gin and Kraken rum.
While the industry has struggled with extended shortages of glass, used to bottle spirits, Becle executives said these appeared to be easing and the company was broadening its supplier base.
(Reporting by Sarah Morland and Aida Pelaez-Fernandez; Editing by Brendan O’Boyle and Mark Potter)