Tequila sunrise
Sipping with Jose Cuervo
Good morning, margarita mixers. This is your Stock Market Rundown for May 6th, 2024. Thanks for joining me for another week of finance fun. Let’s dig in:
TODAY’S TOP STORY: SALT ON THE RIM
What was your last experience with tequila? A margarita on an all-inclusive vacation? A few too many shots (paired with salt and lime, of course) at your buddy’s bachelor party?
Either way, there’s a good chance the tequila you enjoyed was José Cuervo, the world’s bestselling brand. Nearly one in four bottles of tequila sold in the US is Cuervo.
José Cuervo is owned by liquor conglomerate Becle, which is controlled by one of Mexico’s wealthiest families—who happen to be direct descendants of Don José Antonio de Cuervo. Yes, José Cuervo was an actual guy. And forget those Dos Equis commercials—José might have been the real “most interesting man in the world”.
In 1758, Cuervo was granted permission from the king of Spain to cultivate and harvest the blue agave plant in the highlands of Jalisco, Mexico. He applied European distillation techniques to the traditional native fermented agave beverage, creating a spirit that evolved into tequila.
Today, Becle owns a bunch of liquor brands, like Kraken rum and Proper Twelve whiskey, but tequila is definitely management’s drink of choice. Becle’s recent financial results saw earnings taking a hit from currency headwinds, but sales up a healthy 5% in the US market.
The tequila market has seen “premiumization” in recent years, with higher-end brands like Patron and Casamigos attracting refined sippers. But José Cuervo still has a lock on the midmarket, satisfying paloma-enjoyers on patios and bros on spring break alike. Guess that’s how you build an eleven-generation liquor dynasty.
SO WHAT ELSE IS GOING ON?
If cardboard boxes from Amazon are piling up at your front door, you’re not alone. Top shipping group Maersk raised its profit guidance as robust world trade is spurring demand for its services.
Pharma company Novo Nordisk raised its 2024 outlook thanks to fat sales of its weight-loss drugs. 27,000 new patients in the US are abandoning the ice-cream aisle and going on Ozempic every week.
Casino operator MGM Resorts beat estimates on strong performance of its luxury resort properties. Gamblers blowing their bankrolls is always a sure bet.
Carvana, which sells used automobiles online, reported higher profits as more US consumers chose a used vehicle over a brand-new one. Maybe they can get me a 2005 Dodge Caravan with racing stripes and a rear spoiler.
That's it for today, compadres; see you bright and early tomorrow morning. Yours in capitalism, The Axe
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