Bacardi President on Tariffs, US Drinking Trends, and the US Open Honey Deuce

Impact of Tariffs on the Spirits Industry

• ⚠️ The alcohol industry is significantly impacted by global tariffs, particularly the 15% levy on wines and spirits from Europe.
• 📉 Industry groups warn that these tariffs could lead to over 25,000 job losses and nearly $2 billion in lost sales in the US.
• 🤝 Bacardi advocates for the continuation of the USMCA deal as is, especially for imported agave-based products like tequila from Mexico.
• 🌍 A zero-for-zero tariff on spirits and wine with Europe is also a key advocacy point for the industry.

Supply Chain Agility and Pricing

• 🛡️ Bacardi has built increased agility in its supply chains following disruptions from COVID-19 and port strikes.
• 📈 The company has been shouldering cost increases from tariffs but has 3-4 months of inventory in the US to manage the immediate impact.
• 💰 The primary impact is on products imported from Europe, while Bacardi's Puerto Rican operations are not affected by current tariffs.

Evolving US Drinking Trends

• 📊 A recent Gallup poll indicated a record low of 54% of US adults drinking alcoholic beverages.
• 💡 However, Bacardi observes that Gen Z participation and engagement with alcohol are increasing, from 46% to about 70%.
• 🎯 This engagement is more intentional and focused on memorable social experiences, with growth seen in premiumization within the spirits portfolio.

The US Open and Brand Relevance

• 🎾 Bacardi has a 19-year partnership with the US Open, highlighting the success of the Grey Goose Honey Deuce cocktail.
• 🍹 Over half a million Honey Deuce cocktails were sold at the US Open last year, with sales already exceeding that pace this year.
• 🌟 This partnership has made the Honey Deuce synonymous with the US Open, helping to keep Bacardi brands at the center of cultural relevance.
• 📝 The recipe for the Grey Goose Honey Deuce includes vodka, fresh lemonade, raspberry liqueur, and honeydew melon balls.