Grupo Bimbo Faces Profit Decline Amid US Consumption Slowdown

Mexico City-based Grupo Bimbo, the world's largest bakery company, has experienced a consumption slowdown in the United States, its most important market. Despite the decrease in US sales, growth in other regions has helped the company maintain financial balance. 

Bimbo's net sales for 2024 reached a historic MX$408.3 billion (US$20 billion), reflecting an annual increase of 2.1%. Growth was attributed to a combination of factors, including a favorable pricing strategy, increased volume, a beneficial exchange rate, and acquisitions made throughout the year.

However, the company's majority net profit saw a significant decline of 18.9%, dropping from MX$15.477 billion in 2023 to MX$12.545 billion in 2024. Adjusted EBITDA saw a marginal increase of 1%, reaching MX$55.474 billion compared to MX$54.942 billion the previous year.

“2024 reflected our resilience, innovation, and unwavering commitment to excellence, in addition to the importance of being a highly diversified global company,” said Rafael Pamias, CEO, Grupo Bimbo, in the company’s annual report.

Regional Performance Highlights

The Europe, Asia, and Africa (EAA) region stood out with record sales of MX$45.044 billion, marking an 11.1% increase from MX$40.545 billion in 2023. Growth was driven by strong sales performance in Romania, India, the United Kingdom, and Morocco. Similarly, Latin America demonstrated strong sales revenues rising 8.8% to MX$39.879 billion compared to MX$36.647 billion the previous year.

In contrast, North America faced weaker consumer demand, leading to a 1.7% decline in annual sales, closing at MX$189.330 billion versus MX$192.534 billion in 2023. In Mexico, however, the company experienced a 4% growth in net sales, reaching MX$151.164 billion. This growth was fueled by increased volume in key categories, including pastries, cookies, and salty snacks.

Preparing for Potential US Tariffs

As part of its forward-looking strategy, Grupo Bimbo is evaluating ways to mitigate potential disruptions caused by US trade policy changes. With US President Donald Trump advocating a 25% tariff on Mexican products, the company is preparing contingency plans.

Bimbo’s CEO stated that one of the key strategies to address this challenge is to increase local supply. However, specific details on which raw materials, inputs, or products would be sourced locally instead of being imported from Mexico remain undisclosed. The company emphasized that most of its products are already manufactured within the US through its extensive bakery network.

“Local production allows us to shift production if necessary, ensure business continuity, and minimize potential impact,” Pamias noted during a call with analysts discussing the quarterly results.

Despite the challenges faced last year, Bimbo remains optimistic. The company projects double-digit sales growth this year, supported by a potential rebound in North American markets, which experienced declines in 2024.

In recent news, Grupo Bimbo received top honors in all categories of the fourth edition of the Exceptional Companies awards. The recognition is granted by the Communication Council, the Business Coordinating Council, and the Institute for the Promotion of Quality, reported MBN. Out of 80 socially focused initiatives recognized this year, seven of Grupo Bimbo’s practices were named exceptional. The categories included Employee Well-Being, Digital Transformation, Supplier Development, Contribution to Sustainable Development Goals (SDGs), Ethics and Transparency, Diversity and Inclusion, and Business Model Innovation. Additionally, its approach to Personalizing and Creating Meaningful Customer Experiences was acknowledged as a best practice. 

“These recognitions are the result of the hard work of thousands of collaborators. Achieving exceptional practices requires willingness, coordination, and effort from the entire team. When everyone rows in the same direction, it is easier to achieve exceptional results that benefit all," said Javier García, Director of Labor Relations, Grupo Bimbo Mexico.