News

Agave prices "through the roof" - Campari Group CFO

Most popular

How to win the marketing war in spirits

Heineken 0.0's march to global success - Analysis

Where will Pernod focus its attention in 2019-21?

Is cannabis a new exit strategy US craft beer?

MORE

The cost of agave continues to rise, Campari Group's chief financial officer has flagged, as Tequila's popularity increases.

The price of agave, which is used in the Tequila production process, has risen rapidly in recent years

The price of agave, which is used in the Tequila production process, has risen rapidly in recent years

Speaking after the company's full-year 2017 results announcement yesterday, CFO Paolo Marchesini said agave prices have leapt from MXN6 (US$0.3) per kilo to reach MXN22 per kilo. "This is probably causing about EUR10m-to-EUR12m of negative impact on our gross margin," he said.

Marchesini is expecting that the price of agave "will come down at the back end of next year" as the balance is restored between agave shortages and demand for Tequila. "It's a very cyclical situation, which is not driven by Mexican local inflation," he said. "It is primarily driven by the shortage of agave."

Meanwhile, Campari CEO Bob Kunze-Concewitz described the Tequila category "on fire in the US". 

The company owns the Espolòn and Cabo Wabo brands, which were both credited with helping drive US performance in the 12 months of last year

"We are performing particularly well ... and we expect that performance to continue in the years to come," Kunze-Concewitz said. "With regards to agave sourcing strategy, clearly this is an area of utmost importance to us and this is something we are studying."

"Money has never burnt a hole in our pocket" - Click here for just-drinks' interview with Campari CEO Bob Kunze-Concewitz


Sectors: Company results, Spirits

Companies: Gruppo Campari

Related Content

Campari Group delivers solid H1 2018 as US, Australia underpin 5% sales rise - results data

Campari Group delivers solid H1 2018 as US, Australia underpin 5% sales rise - results data...

Growth trend continues for Gruppo Campari in YTD 2017 - results

Growth trend continues for Gruppo Campari in YTD 2017 - results...

Campari Group 2017 - results data

Campari Group 2017 - results data...

Campari Group not keen on Irish whiskey - CEO

Campari Group not keen on Irish whiskey - CEO...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?