Friday 27 January 2023

US operations helped offset Fifco’s lower sales in Costa Rica

The company earned ¢17.4 billion last year, despite a drop in the hotel and beverage segment in the country; and generated savings of ¢19.6 billion due to the suspension of non-essential investments and reduction of working hours

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27 January 2023 - At The Banks - BCCR

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QCOSTARICA – Costa Rica’s Florida Ice and Farm Company S.A (Fifco) beverage business in the United States and the food business in Central America offset, during 2020, the sharp decline in the real estate and beverage segment in Costa Rica.

Beer sales in Costa Rica fell 12% last year compared to 2019, Fifco confirmed. But business growth in the United States made up for the decline.

In the US, the Costa Rican food and beverages company owns what was previously North American Breweries (NAB).

The company had a net profit of ¢17.4 billion colones (US$27.8 million dollars) last year, despite the effects of the health pandemic, according to audited financial statements, published on March 18.

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Gisela Sánchez, Fifco’s director of Corporate Affairs, explained that the company also achieved savings of ¢19.65 billion colones (US$ 31 million dollars) by suspending non-essential investments, reducing working hours in the country, and cutting marketing expenses.

“The very positive results in the United States, in 2020, managed to compensate a little for the impact we had with the pandemic here in Costa Rica,” said Sánchez.

Fifco ended 2020 with a total of 5,386 workers, of which approximately 4,000 people work in Costa Rica.

The health crisis caused the company to announce the layoff of 500 people in the hospitality division last December.

The business activities in which the company has its main businesses were the hardest hit as a result of the health pandemic.

For example, the arrival of tourists to the country fell 68%, during the past year. At the end of 2020, 1,011,912 visitors arrived in the country, while, in 2019, there were 3,139,008 people, according to the Instituto Costarricense de Turismo (ICT) – Costa Rican Tourism Board.

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In the case of Costa Rica’s restaurant and hotel sector, the contraction of these economic activities was 40.7%, according to the Central Bank of Costa Rica (BCCR).

Last January, the Costa Rican Chamber of Restaurants and Related Products reported that, in 2020, 5,000 establishments in the sector such as sodas, bars and restaurants were permanently closed.

Fifco USA brands

Results by business

In the beverage segment, Fifco reported total sales of ¢543.5 billion, during the past year, which meant a reduction of 7.6%, compared to 2019, according to the financial statements.

“In Costa Rica, there was a 12% reduction in volume (of sales) in beer and a 16% reduction in soft drinks in Central America. However, it was partially offset by a 5% growth in Fifco’s sales in the United States,” explained the Director of Corporate Relations.

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Sánchez noted that the strategy of focusing on flavored alcoholic beverages triggered the commercial impulse in the United States.

She also announced that the company decided to reduce its participation in the craft beer segment in that North American market, closing two production plants, leaving only one in operation.

The company’s real estate division suffered the most significant decrease in revenue. The company operates the Reserva Conchal hotels, these are Hotel W, The Westin Golf Resort & Spa, and On-Premise.

In the food division, the company did report an increase in sales in 2020, a 5.3% increase over the previous year

“The growth was in Central America and was driven by higher exports of the Ducal brand to the United States and an increase in food consumption in Central American countries during the pandemic,” said the spokeswoman.

However, as a result of the sanitary measures, the company saw a lower volume of sales in Costa Rica in the Musi and Musmanni stores.

Sánchez explained that, as the Costa Rican government relaxed the restrictions, a rebound in the activity of the company began, mainly starting last October.

For this year, Fifco will maintain a conservative growth position and do not plan to reactivate investments, but will only make those that are essential for business.

Fifco soft driink brands in Costa Rica

Fifco subsidiaries in Costa Rica include: Cerveceria Costa Rica (beer brewery), Florida Bebidas, Productora La Florida, Reserva Conchal, Desarrollos Hoteleros Guanacaste, Florida Bebidas y Alimentos, Distribuidora Centroamericana de Bebidas, Embotelladora Centroamericana, Industrias Alimenticias Kern’s,
and Corporación Musmanni Internacional.

Well known Fifco brands in Costa Rica include: Imperial, Pilsen, Bavaria, Rock Ice, and Heineken (under license), distribution rights for Pepsi Cola, Cristal (bottled water), Kern’s, Tropical, Musmanni (retail stores).

In the United States, Fifco has owned since December 2012 North American Breweries to manage its brewery acquisitions (Genesee Brewing Company, Pyramid, and Magic Hat) and Labatt USA, a subsidiary of the Canadian Labatt Brewing Company, including the American rights to its core Labatt products (such as Blue, Blue Light, and Labatt 50).

 

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