LatAm Food & Beverages: Staples demand still lacks momentum; KO bottlers remain preferred

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LatAm Food & Beverages: Staples demand still lacks momentum; KO bottlers remain preferred

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LatAm Food & Beverages

Staples demand still lacks momentum; KO

bottlers remain preferred

Price Objective Change

1Q26 results confirmed soft consumption 19 May 2026

1Q26 results point to continued weak demand across Mexican and Chilean F&B names, Equity

despite a more moderate pricing stance. Management teams remain cautious on the Latin America

outlook amid elevated geopolitical risks tied to the US-Iran conflict. Guidance is largely Food & Beverages

unchanged, with Bimbo as the exception: it lowered sales expectations on FX but now Fernando Olvera >>

expects EBITDA mg. expansion of 60-110bps vs. modest expansion before. See Exhibit 2. Research Analyst

Merrill Lynch (Mexico)

Purchasing power at risk +52folvera@bofa.com55 5201 3473

Price sensitivity remains high, with companies closely monitoring consumption patterns. Isabella Simonato >>

The Middle East conflict has revived inflation concerns via higher oil prices, adding ResearchMerrill LynchAnalyst(Brazil)

pressure on real incomes. Tighter monetary policy can weigh on demand. Volatility in +55 11 2188 4243

isabella.simonato@bofa.com

input costs suggests further pricing actions may be required into late 2026 and early

Julia Zaniolo >>

2027 to protect margins. Research Analyst

Merrill Lynch (Brazil)

Ratings unchanged; price objectives revised +55julia.zaniolo@bofa.com11 2188 4367

We reiterate our preference for LatAm KO bottlers, supported by stronger operational

momentum. We remain cautious on food and alcoholic beverage names amid persistent

weakness in US demand. We raise our price objectives for Arca, KOF, Andina, and Bimbo, Exhibit 1: KO bottlers remained preferred