According to Grupo Kuo's quarterly report, Herdez del Fuerte, a producer of purees, sauces, and guacamole, increased its prices to compensate for inflationary pressures during the fourth quarter of 2022, such as the increase in the cost of raw materials like avocado, which increased by 43%.
Mexico and the United States, two markets where Herdez del Fuerte operates, have faced inflation levels that at the end of the year stood at 7.82% and 6.5%, respectively.
According to the report, during the last three months of 2022, Grupo Kuo's consumer business recorded a 20% increase in its revenues, something that was due to higher prices and volumes. Despite this, in the fourth quarter, operating flow or EBITDA in this segment fell by 19% over the same period of 2021.
At a consolidated level, Kuo Group recorded a 2% growth in revenue and a 24% drop in operating flow in the fourth quarter.
“This contraction is explained by the sharp increase in raw material prices, higher distribution and transport costs, lower prices in the chemical sector businesses, and an unfavorable effect due to inventory devaluation,” the company stated in its quarterly report.
Source: bloomberglinea.com with information from Zenyazen Flores