Renata Cabral

Renata Cabral asked if OXXO Brazil and Bara are now considered scalable platforms with durable economics or if they are still in a proof-of-concept phase. She also inquired about FEMSA's top two biggest opportunities for the next five years and where the company is allocating the most time.

Answer

CEO José Antonio Fernández Garza-Lagüera stated that Bara is more advanced and ready for hyperscaling, with a tailored value proposition and new distribution center, expecting faster unit growth. OXXO Brazil, while a São Paulo bet, is focusing on quality over quantity, aiming for 100 new stores in 2026 to mature processes before hypergrowth. He identified OXXO Mexico and Coca-Cola FEMSA Mexico as current priorities and motors of growth, with OXXO Brazil and Bara as exciting future opportunities. Juan Fonseca added that Bara is aspiring to grow by one-third in 2026, OXXO Brazil by 15%, and OXXO Mexico by less than 5%, reflecting varying stages of conviction and maturity.

Renata Cabral asked if OXXO Brazil and Bara are considered scalable platforms with durable economics, and which of the major growth opportunities (Bara, OXXO Brazil, OXXO USA) FEMSA is allocating more time to, or sees as bigger in the next five years.

Answer

CEO José Antonio Fernández Garza-Lagüera confirmed Bara is more advanced and ready for hyperscaling with a tailored value proposition, expecting faster unit growth than OXXO Brazil. OXXO Brazil is a São Paulo-focused bet, prioritizing quality over quantity, aiming for 100 new stores in 2026 while maturing processes. He noted OXXO Mexico and Coca-Cola FEMSA Mexico remain top priorities, but OXXO Brazil and Bara are exciting growth drivers, with Europe and OXXO USA further down the road. Investor Relations Director Juan Fonseca highlighted the planned store opening numbers for 2026 (Bara: one-third growth, OXXO Brazil: 15%, OXXO Mexico: less than 5%) as an indicator of conviction.

Renata Cabral from Citigroup asked about FEMSA's long-term ambition for the OXXO Digital Ecosystem and financial services, OXXO's distinctive niche against competitors like wallets and fintechs, and the top capabilities the company plans to invest in for this area.

Answer

José Antonio Fernández Garza-Laguera, CEO of Fomento Económico Mexicano, views Spin by OXXO as a digital extension enhancing OXXO's value proposition and customer lifetime value, noting that Spin by OXXO users with Premia loyalty consume significantly more. He emphasized creating an ecosystem for rewards, personalized promotions, and frictionless experiences, seeing digital as an opportunity to increase interaction and use OXXO for cash-ins and withdrawals, even in a highly digital future. He highlighted innovative uses like QR code tipping and cash withdrawals.

Renata Cabral asked about FEMSA's ambition for the OXXO Digital Ecosystem (Spin by OXXO and Spin Premia), its distinctive position against other fintech solutions in Mexico, and the top capabilities the company plans to invest in.

Answer

José Antonio Fernández Garza-Laguera, CEO of Fomento Económico Mexicano, views Spin by OXXO as a digital extension enhancing OXXO's value proposition and user lifetime value, noting that combined Premia and Spin users consume significantly more. He aims to embed the ecosystem for rewards, personalized promotions, and frictionless experiences, seeing it as an opportunity to dramatically increase customer interaction. He highlighted the convenience of Spin by OXXO, even for cash withdrawals via QR codes, and expressed optimism about digital transactions covering potential service declines.

Renata Cabral asked about the remaining incremental savings potential in distribution cost-to-serve for Brazil in 2026. She also questioned whether Brazil is still receiving incremental capacity investment or if the current footprint supports growth without further fixed cost investment this year.

Answer

CEO Ian Craig noted that most freight savings in Brazil from the Porto Alegre plant reopening would be realized in the first few months of 2026. He confirmed significant capacity investment (over five new lines) has been made, with no new plant investments projected until 2029 for a 2030 start. CapEx as a percentage of revenue is expected to decrease from 8% to 6.5% in the coming years.

Renata Cabral asked about remaining incremental savings potential in Brazil's distribution cost to serve for 2026 due to supply chain improvements, and whether Brazil still requires incremental capacity investments.

Answer

CEO Ian Craig indicated that most freight savings from the Porto Alegre plant normalization would be seen in the next couple of months. He noted that Brazil has received significant capacity investments (over 5 new lines), so major new plant investment is not expected until 2029 for a 2030 start, with CapEx as a percentage of revenue expected to drop from 8% to 6.5% in coming years.

Renata Cabral asked for an evaluation of Mexico's Q3 performance, distinguishing between the impact of weather and the economic situation, and sought color on monthly performance. She also inquired about the outlook for Argentina, given observed improvements but also a recent slowdown in overall consumption.

Answer

CFO Gerardo Cruz stated that weather was less of a factor in Mexico's Q3 performance compared to the previous year, with macro development (a decrease across the entire Nielsen basket) being the main driver of underperformance. He anticipates a marginal macro improvement in 2026. CEO Ian Craig noted that Argentina's consumption slowed significantly after the Buenos Aires province election, with the outcome of upcoming legislative elections being crucial. He suggested a scenario of sluggish growth next year, rather than continuous recovery, depending on the government's ability to push through reforms.

Renata Cabral from Citibank asked for an evaluation of how much of Mexico's year-to-date performance is attributable to weather versus the economic situation, requesting monthly performance color. She also inquired about the outlook for Argentina, specifically the ability to conserve current improvements or continue growth amidst a slowdown in overall consumption.

Answer

CEO Ian Craig stated that weather was less of a factor in Mexico's Q3 2025 performance compared to the previous year, as both periods had unfavorable weather. He identified the overall macro development as the main driver of underperformance, noting that the entire Nielsen basket saw a decrease for the first time this quarter. For Argentina, Ian Craig observed a slowdown in consumption, particularly since the Buenos Aires province election, with future outlook dependent on the upcoming legislative elections and the government's ability to push through reforms. He suggested a scenario of sluggish growth next year is possible, rather than continuous recovery.

Renata Cabral of Citigroup Inc. inquired about the company's capital expenditure plans, asking if there were any changes for Mexico given the challenging first half. She also requested an update on the operational status of the flood-affected plant in Rio Grande do Sul, Brazil, and the associated CapEx plans for that region.

Answer

CEO Iain Craig García stated that long-term structural CapEx plans remain intact, while volume-linked investments are being adjusted. CFO Gerardo Cruz Celaya confirmed the company maintains its CapEx target of 8-9% of net sales but will phase projects dynamically. IR Director Jorge Collazo Pereda reported that the Porto Alegre plant is back to 100% production and distribution capacity, with a full SKU portfolio restored by July.

Renata Cabral of Citigroup Inc. asked for an update on CapEx plans, questioning if there were any changes for Mexico, and requested information on the operational status and CapEx strategy for the Porto Alegre plant in Brazil.

Answer

CEO Iain Craig García stated that long-term structural CapEx projects are proceeding, while volume-dependent spending is being adjusted. CFO Gerardo Cruz Celaya confirmed the company maintains its CapEx target of 8-9% of net sales but is dynamically phasing projects. IR Director Jorge Collazo Pereda reported that the Porto Alegre plant is back to 100% capacity and has restored its full SKU portfolio, with a flood containment wall project planned for 2026.

Renata Cabral inquired about the potential impact of GLP-1 drugs on Ambev's portfolio, whether 2025's weakness could be attributed to them, and the company's mitigation strategies given the upcoming patent expiry in Brazil.

Answer

Carlos Lisboa (CEO, Ambev) clarified that 2025's weakness was primarily due to behavioral changes caused by weather impacting out-of-home occasions, not attitudinal shifts. He stated that Ambev has not observed any meaningful impact from GLP-1 drugs but will continue to monitor the emerging trend and act accordingly, highlighting the category's versatility with zero alcohol, gluten-free, lower calorie, and flavored beer options.

Renata Cabral asked about the potential impact of GLP-1 drugs on Ambev's portfolio, questioning if 2025's weakness could be attributed to this trend. She also inquired about expectations for 2026/2027, given an upcoming patent expiry in Brazil, and how Ambev plans to mitigate any effects or offer alternative consumer options.

Answer

CEO Carlos Lisboa clarified that 2025's weakness was primarily due to behavioral changes driven by weather, impacting out-of-home occasions, rather than attitudinal shifts. He stated that Ambev has not observed any meaningful impact from GLP-1 drugs on its business but is monitoring the emerging trend. Lisboa highlighted the company's strategy of developing a versatile category with options like zero-alcohol, gluten-free, lower-calorie, and flavored beers to address diverse consumer needs.

Renata Cabral asked for insights into the 2026 outlook for raw material costs and requested details on Ambev's current hedging strategy for these inputs.

Answer

CFO Guilherme Fleury de Figueiredo Ferraz Parolari stated that Ambev is maintaining its standard 12-month forward, non-speculative hedging policy to protect the business. He reiterated confidence in the 2025 cash COGS per hectoliter guidance for Brazil Beer (5.5% to 8.5% range) but declined to provide any specific guidance for 2026.

Renata Cabral from Citigroup asked for an update on the Brazilian beef cycle outlook and whether the company would consider providing more detailed disclosures on its prepared foods business, given its increasing strategic importance.

Answer

Global CEO Gilberto Tomazoni expressed optimism for the Brazilian beef cycle, citing structural improvements like increased feedlot usage. Global CFO Guilherme Cavalcanti explained that prepared foods are embedded across segments, making a separate disclosure complex, but estimated that highly processed items represent about 15% of the business, with branded products reaching up to 50%.