By Kylie Madry
MEXICO CITY (Reuters) -Mexican distiller Becle, parent company of the Jose Cuervo tequila brand, expects to raise prices in 2022 as both demand and costs rise, Chief Executive Officer Juan Domingo Beckmann said in a call with investors on Friday.
“Looking into 2022, we will be seeking to mitigate the cost pressures for the global supply chain situation by way of increasing price across our markets and our portfolio,” said Beckmann, whose family owns the company.
Executives said the company, which reported a 72% jump in net profit on Thursday, is expecting “mid-single-digit” growth in sales this year, backed by more investment.
The distiller will invest around $250 million in capital expenditures and more advertising in 2022, Chief Financial Officer Fernando Suarez said.
Beckmann added the company will launch several new lines this year, adding to more than 30 brands in the Becle portfolio.
Executives predicted growth across various regions, but particularly in the United States.
“The tequila category is the fastest-growing spirit category in the (United States), so we believe that it’s feasible that we continue to grow,” said Luis Fernando Felix, head of Proximo Spirits Inc, Becle’s U.S. subsidiary that manages Jose Cuervo distribution.
After the call, Barclays said the company’s results were better than expected.
“We believe Cuervo is well positioned to cope with any cost headwinds in 2022,” analysts said in a report.
Shares in Becle were up around 4.6% following the call.
($1 = 20.5075 pesos at end-December)
(Reporting by Kylie MadryEditing by Chris Reese)
