Arca Continental optimizes hedge accounting with Bloomberg MARS

Arca Continental

Arca Continental is the second-largest Coca-Cola bottler in Latin America and one of the most important producers, distributors, and sellers of the brand. The company began bottling Coca-Cola products in 1926 and now serves more than 128 million consumers in Mexico, Ecuador, Peru, Argentina, and the U.S. In 2023, Arca Continental, which also sells snacks under the Bokados brand in Mexico, Inalecsa in Ecuador, and Wise in the U.S., reported nearly $12 billion in sales.

FEATURED PRODUCT

INDUSTRY

Non-Alcoholic Beverages

REGION

North and South America

GOAL

Mitigating risks and volatility exposure by gaining insights into executed and potential hedge transactions

Bloomberg MARS reduced hedge accounting time by 80% and enabled faster, data-driven decision-making through real-time insights and accurate exposure analysis.

The automation enabled Arca Continental to implement a scalable, continuous hedge management workflow, reducing manual effort and ensuring consistency across growing operations.

By reducing manual reporting time from 160 to 30 hours, Arca Continental gained transparency and operational efficiency, empowering the team to focus on strategic decisions.

We were looking for a robust solution that would provide us with volatility and exposure analysis to limit our risks and, specifically, give us more insights into executed and potential hedge transactions.

Daniel García
Financing and Risk Department Lead at Arca Continenta at Arca Continental

Situation

In 2017, Arca Continental expanded its operations into the U.S. following the acquisition of Great Plains Coca-Cola Bottling Company, headquartered in Oklahoma, making the Mexican company the sole franchised bottler in Texas, parts of Oklahoma, New Mexico, and Arkansas. As the company grew and markets experienced greater volatility, Arca Continental needed a solution to better manage its exposures and hedges. After the 2017 acquisition, the volume of active hedge transactions increased sixfold—from around 50 to approximately 300—requiring the company to upgrade its accounting process.

Expansion into the U.S. market

Growth in hedge volume

Problem

Following the acquisition of a bottler in the U.S., Arca Continental faced a significant increase in hedge transaction volume, making manual management in Excel inefficient and time-consuming. Tracking approximately 300 transactions without an automated system required up to 160 hours to prepare quarterly reports, impacting the accuracy of financial statements and strategic decision-making. Additionally, the company lacked real-time access to data, making it difficult to monitor hedge positions and reliably assess derivatives.

Operational inefficiency

Impact on reporting accuracy

Solution

To address these challenges, Arca Continental implemented Bloomberg MARS Hedge Accounting, an automated solution for hedge designation, effectiveness testing, and accounting measurements. The implementation provided real-time access to information and greater transparency in financial reporting. As a result, the time required to process hedge accounting calculations was reduced from 160 to 30 hours, and portfolio evaluations, which previously took up to three days, now take only five minutes. The solution also helped identify discrepancies in derivative valuations provided by banks, ensuring greater accuracy in risk management.

Financial efficiency

Hedge accounting automation

Time reduction

Before Bloomberg MARS, hedge accounting was the last thing we used to finalize in our quarterly results. Now, it’s the last thing we worry about. We finally have a reliable and scalable solution for our quarterly information.

Daniel García
Financing and Risk Department Lead at Arca Continental

Reduction in operational time: Hedge accounting processes are up to 80% faster, increasing financial team efficiency.

Greater accuracy in valuations: Identification of inconsistencies in bank-provided valuations, ensuring reliable data.

More strategic decision-making: Daily exposure and scenario analyses to optimize trading.

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